The Hindu Business Line : Consolidation leaves many fund managers jobless

SHRINKING job opportunities and inflated salaries are giving many fund managers nightmares. The situation has worsened with growing consolidation in the industry.

In two of the recent acquisitions in the industry - Principal's buy of Sun F&C's funds and UTI's acquisition of IL&FS Mutual Fund - hardly any employees have been hired by the acquirer.

"The final handing over of the Sun F&C funds to Principal Asset Management Company (AMC) was completed last week. No one from the team at Sun F&C was absorbed by Principal," said Mr Gul Tekchandani, Chief Information Officer, Sun F&C.

The situation is similar with IL&FS AMC and UTI as well. "A lot of people have been interviewed by UTI AMC. No one has been made any offer for employment as yet. In fact, quite a few people have been absorbed by IL&FS," said a source.

Fund management staff are the worst affected as they are specialists and the acquiring company already has a fund management team in place.

"The problem is that you don't want to accept a job that would involve the levels of hierarchy being flouted. Fund managers do not want to end up reporting to people who were earlier their contemporaries," said Mr Tekchandani.

Sales, marketing and operations people from "acquired" AMCs are able to find jobs with competitors reasonably easily as the industry is in a growth phase now, according to industry insiders.

But the perception among AMCs is that fund management should be consolidated in order to give optimum benefits.

Also, new players entering the industry are not necessarily hiring from within the industry.

"We would look at the person and their experience, not whether they have worked in mutual fund houses or not," said a Fidelity India spokesperson.

Portfolio management services (PMS) is an alternative area that fund managers are looking at for employment.

Even though the service segment is quite small in India currently, it is viewed as a sector that would potentially boom in the future.

A lot of fund managers are trying to move into PMS from management of mutual funds.

PMS is viewed as a profession with a financial upside over fund management as remuneration in PMS usually also includes a share of the growth of the portfolio.

"But then, the risks are also very high," counters a fund manager who is looking for alternative employment.

People who run their own PMS would be able to optimise on their experience and returns, but this requires an "entrepreneurial" bent of mind.

"People who do not want to run their own PMS business would not be very excited about this option," he said.

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