Future Fund to lift Melbourne’s profile

At the beginning of April, the Future Fund had $41 billion of funds, most of which was uninvested. To manage a fund of this size, and it is going to grow considerably in the next 12 months, an army of financial services professionals will need to be recruited.

The administration of the fund will be based in Melbourne, which has been seen as a graveyard for funds management professionals in some quarters.

However, with the arrival of the Future Fund, the search for funds management and superannuation professionals is gathering speed.

While some of the top positions have been filled, the group general manager level is being actively recruited.

The search for executives has put pressure on funds management recruitment, an industry where good people were already in short supply.

The search for executives has also extended to Sydney-based fund managers looking to either boost staff at the Melbourne office or establish a team in the southern city.

However, not all fund managers have to start a branch office.

Vanguard picked Melbourne as its Australian headquarters in 1996 and has grown to 145 staff in that period.

“There is a shortage of investment talent,” confirmed Vanguard Investments Australia managing director Jeremy Duffield.

“But there are always people who want to come home to Melbourne (from Sydney) and there are now opportunities for them to do that.”

Duffield said while not many Sydney executives who have always worked in the New South Wales city make the move south, there was still a good pool of talent in Melbourne to recruit from.

“We find at Vanguard we do not often transplant executives from Sydney as there are always people to recruit in Melbourne to fill positions,” he said.

“The Victorian Government is very helpful in attracting financial services firms to Melbourne, and that widens the recruitment pool.”

St AndrewsAustralia director wealth management Paul Northey agreed recruiting in Melbourne was difficult.

“The financial services recruitment market is tight, full stop,” he said.

“If you are looking for certain skill sets, the pressure is on to look at internal promotion rather than try and recruit from the market which is difficult.’

Attracting the Future Fund to Melbourne was a good move, despite the pressure it will put on recruitment, Northey said.

“It will create career opportunities in Melbourne and build a deeper pool of skilled people to recruit from.”

The Future Fund is not the only organisation expanding as Northey confirmed.

St Andrews was expanding its operations in Australia and was actively recruiting nationally, not just for its head office in Melbourne.

However, he also reports there is a number of former Melbourne-based executives returning to the city. This follows on from the late 90s when a number of fund managers moved their investment operations to Sydney, taking staff with them.

“People are now more mobile and it is not difficult to get them to shift from Sydney back to Melbourne,” he said.

“Moving to Melbourne is no longer the end of their careers.”

Northey said Melbourne still had a number of large financial institutions such as NAB, ANZ, Aviva, AXA and IOOF, as well as a number of large superannuation funds.

Mellon Global investments managing director James Gruver also agreed there was a real shortage of experienced funds management professionals, especially in Melbourne.

“There is more asset managers coming to Australia, and in particular to Melbourne, and that is exacerbating the situation,” he said.

“It is a real supply and demand situation and good people are attracting premiums for their services.”

Gruver said with overseas managers looking for staff, the Future Fund and Victorian Managed Funds Corporation also expanding, there is not enough supply of staff.

“Melbourne is gaining momentum and creating a critical mass of investment people,” he said.

“That will create a lot of opportunities for good people and their careers.”

And the search for good investment people is widening beyond Melbourne and Sydney.

“People are looking overseas for staff, but they will have to pay premiums to attract them to Australia,” Gruver said.

“It is just going to get more competitive and people will have to use innovative recruiting practices to find good people.”

However, he said the shortage of people will mean some jobs will be split between Melbourne and Sydney, with executives spending time in both cities each week.

But finding the right staff is not the whole battle; brand is also very important when recruiting, Duffield said.

“In the US, Vanguard is seen as a top 100 employer, and we build on that reputation in Australia,” he said.

“We also pay a lot of attention to retaining key staff, which helps solve recruitment shortages for us.”

Northey agreed establishing a brand that people want to join is crucial in attracting the right people.

“After we purchased Whittaker Mcnaught, people suddenly realised we were serious and it attracted a number of enquiries about positions in St Andrews,” he said.

“Having a respected name such as Whittaker Mcnaught is an endorsement and it attracts good quality people.”