eFinancialCareers

What was hot and what was not in Scotland in 2007? Here’s our considered verdict…

2007 was a good year for…

Fund management
Fund managers in Scotland were defiantly bullish this year: the battle for talent intensified, top names engaged in a game of musical chairs, and profits and revenues increased.

Scottish Widows Investment Partnership (SWIP), for example, lost its chief executive John Phillips in January, and its head of European equities went to BlackRock. Meanwhile, SWIP was also quick to replace the lost talent.

New players in town included Fidelity, which despite being linked with every high profile Scottish departure, started in October with a team of just two. Schroders also set up shop this year.

SWIP reported a 24% rise in profits, though assets under management fell to £97.3bn after Lloyds TSB removed £5.7bn of its pension funds. Standard Life Investments (SLI), meanwhile, reported its highest ever mutual fund sales in the third quarter of this year, rising 22% to £288m.

Fund administration
The number of financial services jobs in Scotland has swelled by 60% over the last five years, according to figures from Scottish Financial Enterprise.

Fund admin jobs played a large part – Citigroup now employs around 235 people in Edinburgh, BNP Paribas created 370 jobs in June, and HSBC and JPMorgan both have a presence.

“Demand massively outstrips supply in fund admin,” says Steve Shields, manager financial services Scotland at recruiters Badenoch & Clark. Salaries for fund administrators have risen from £20k to £25k in the last year, according to figures from recruiters Joslin Rowe.

Financial services recruiters
Scottish recruiters will be having a very Merry Christmas this year. The skills shortage in Scotland has resulted in more business, and candidates are said to be more open to approaches from headhunters.

David Bond, managing director of search firm Cairns Bond, says there are more scalps on offer than ever: “Those earning £50-70k have been much more responsive.”

Glasgow
The tug-of-war over Resolution finally resulted in a successful bid from the Pearl Group. Had Standard Life been successful, analysts predicted the merger or possible dissolution of Resolution's fund management arm. Instead, Pearl has promised to safeguard 400 jobs and integrate the fund management business to create an £85bn powerhouse in Glasgow.

Meanwhile, in the back office, Morgan Stanley added a further 600 to its Glaswegian finance, operations and tech centre; BNP Paribas focused its Scots expansion on Glasgow; Barclays Wealth added 145 jobs and plans a further 500 by 2009; and JPMorgan’s European tech centre in Scotland’s biggest city will eventually employ 900.

But 2007 was a bad year for…

Finding people
Poaching, bidding wars, job hopping, recruiting school-leavers – there are, quite simply, not enough people to fill the number of roles that have been created in financial services in Scotland this year.

The most flighty group of all – contractors – have seen a big salary hike, according to Badenoch & Clark, from £200-250 a day a year ago to £350-£400 a day this year in the project accounting space.

But largely, according to Margaret Dyer, managing director of Joslin Rowe, firms are refusing to pay over the odds, and are instead focusing on career development: “Candidates are increasingly looking to the long term, and firms are making a concerted effort to map out a career path for them.”

Royal Bank of Scotland
Despite the RBS-led consortium ousting Barclays in its €70bn takeover of ABN AMRO in October, the Royal Bank has been Scotland’s first victim of the credit squeeze this year.

However, the bank’s £1.5bn write-down would have been somewhat of a relief for Edinburgh’s financial community, who might have been expecting much worse after the announcements from US investment banks.

HBOS, meanwhile, brushed off credit crunch concerns with a mere £180m write-down.

Quantitative fund managers
Quantitative funds haven’t been quite the same since the market gyrations in August, when Goldman’s Global Alpha fund fell 22%. Their travails are liable to snuff out Scotland’s nascent quant funds sector.

Scotland has been slow to progress down the quantitative road anyway, and it was only earlier this year that Scottish investment managers were tipped to be moving slightly away from their traditional long-only route and into the more exotic alternative space.

There is a light at the end of the tunnel, however. As London and New York lick their wounds from the sub-prime fall-out, and those markets less affected – like Scotland – become more wary of risk, the demand for buyside quant analysts to help price derivative products is likely to continue.

eFinancialCareers' editorial team is now taking a Christmas break (but will be intermittently available to answer your questions and moderate your comments). We wish all our readers a very, very Merry Christmas!