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Bankers Jump Ship to Pension Funds for Better Hours and Less Stress

Bankers Jump Ship to Pension Funds for Better Hours and Less Stress

(Bloomberg) -- As money flows to Australia’s not-for-profit pension funds, so does the talent.

With funds under management forecast to almost double to A$2 trillion ($1.4 trillion) within the next decade, the industry is shaking off its staid reputation by bringing investment teams in-house, getting directly involved in takeovers and snaffling up global assets. That’s luring investment bankers and portfolio managers from retail funds looking for a new challenge -- and better hours.

Among the other draws: not-for-profit funds emerged mostly unscathed from a recent inquiry into financial industry misconduct while the reputation of wealth managers such as AMP Ltd. and bank-owned funds was shredded by findings of poor advice and customer rip-offs. And the work is more fulfilling, because the guaranteed flow of funds from mandated pension contributions means they don’t need to hustle for new business.

“We’re in a sweet spot at the moment because the sell-side is really struggling,” John Pearce, chief investment officer at UniSuper, said at a conference last month. “We’re getting a lot of talent on the market that we wouldn’t have seen three to five years ago,” said Pearce, whose Melbourne-based firm oversees more than A$70 billion in retirement savings.

Bankers Jump Ship to Pension Funds for Better Hours and Less Stress

Among those is portfolio analyst Natasha Traugott, who worked as a quant analyst in Canada for more than three years before returning home to join Sunsuper Pty.’s Sydney-based responsible-investment team in March. The 28-year-old said the A$66 billion fund aligned with her personal views, and was located in a more hospitable environment.

“I had a short list of employers and organizations I was interested in,” she said. “I really aligned with their values and their whole concept around benefits for members in retirement, and the fact that they’re a not-for-profit industry fund.”

Bankers Jump Ship to Pension Funds for Better Hours and Less Stress

Not-for-profit funds are becoming an employer-of-choice in a finance industry beset by retrenchments at global investment banks from HSBC Holdings Plc to Deutsche Bank AG and Mitsubishi UFJ Financial Group Inc., Japan’s largest lender. People are even willing to take a pay cut to join, according to Unisuper’s Pearce.

Australian financial firms are also shedding staff as money managers lose mandates and banks cut costs. National Australia Bank Ltd. is eliminating 4,000 jobs, Commonwealth Bank of Australia is restructuring its institutional bank and markets division, and Janus Henderson Group has closed its Australian equities desk.

Meantime, the not-for-profit funds are on a hiring spree.

Bankers Jump Ship to Pension Funds for Better Hours and Less Stress

Melbourne-based AustralianSuper Pty. is seeking around 70 people in New York and London across its unlisted asset investment and foreign exchange dealing teams. Brisbane-based Sunsuper is planning to double its investment strategists and associated support staff by 2021 to lift its ability to buy assets like airports and toll roads in the next three years, Chief Investment Officer Ian Patrick said in an interview in Sydney. It’s also hunting for a new CEO.

The Health Employees Superannuation Trust Australia is building a quant team to enhance its investment prowess. IFM Investors is looking to add more than 100 people within the next three years as it eyes more infrastructure deals in the U.S. and Europe, Brett Himbury, the A$127 billion fund’s chief executive officer, said in an interview in Melbourne.

While pay at industry funds has improved, they still struggle to compete with hedge funds and wealth managers in offering incentives such as an equity stake in a business or big bonuses, said Jon Michel, founder of Jon Michel Executive Search. “Then again, in the private sector you have to be at a top quartile fund to get those,” said Michel, whose firm specializing in investment banking, equity capital markets and private equity recruitment.

Incentives for investment staff at not-for-profit funds reflect a different culture, where the focus is on returns to members without having to worry about hitting a performance target, or rustling up new clients. Fund managers looking after institutional and mom and pop investment dollars spend anywhere from a quarter to half their time speaking with clients and sourcing new money.

“They can just get on and do their job and not be confused and conflicted by other stuff,” Himbury said. “The right sort of people will love it.”

To contact the reporter on this story: Matthew Burgess in Melbourne at mburgess46@bloomberg.net

To contact the editors responsible for this story: Edward Johnson at ejohnson28@bloomberg.net, Peter Vercoe, Katrina Nicholas

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