Large asset managers have increased their combined EU headcount by 38% over the past five years in response to market growth, Brexit uncertainty and increased regulation.
According to figures compiled by the Financial Times, 10 of the world’s largest asset managers, including Amundi, Vanguard and Invesco, now employ nearly 7,000 people in Europe, excluding the UK. The figures do not include BlackRock, Fidelity International or Capital, which declined to provide figures.
Eight asset managers provided data for 2015 and 2020, showing their combined headcount increased from 4,771 to 6,569 during the period, an increase of 37.7%.
The increase in headcount coincided with the rapid growth of the global investment industry, in which assets under management grew from $ 84 billion to $ 110 billion between 2016 and the end of 2019, according to PwC.
The size of UK fund groups grew by 35% over the same period, according to FT. analysis, despite previous predictions that finance jobs would flee the country after Brexit.
Amin Rajan, chief executive of consultancy Create Research, said a combination of quantitative easing and low interest rates had led to the hiring frenzy. “By rocketing asset prices, central banks have indirectly fueled workforce growth in large parts of the industry since 2015.”
He said that the rise of sustainable investment, adoption of machine learning and growth regulatory burden the fund managers confronted had also forced the groups to develop by recruiting specialized staff.
The UK’s vote to leave the EU also boosted recruiting. Most asset managers have either set up EU entities or strengthened existing offices to retain access to EU clients. Luxembourg and Dublin, the two largest domiciles of European funds, have become the main beneficiaries.
Schroders, the UK’s largest listed asset manager, has added nearly 250 people to bring its total workforce in the EU to nearly 900. Amundi, Europe’s largest fund house, now employs more of 3,600 in the region, an increase of over 1,000, although this is in part attributable to its 2016 acquisition from Pioneer.
Managers headquartered in the United States have also grown. Franklin Templeton has nearly 1,240 employees in the EU, up from more than 200, while Vanguard employs 65, up from nine five years ago.
Nicolas Mackel, chief executive of the Luxembourg for Finance lobby group, said the looming end of the UK’s Brexit transition period had added urgency to European hiring plans for asset managers.
“It appeared to them that from January 1, 2021, they will need an adequate level of staff to sell their funds to EU clients and avoid being reprimanded by regulators,” he said. declared.
EU regulators have started demanding more boots on the ground after Brexit raised fears mailbox entities placement in the block. British fund house M&G, which obtained additional licenses in Luxembourg after the Brexit vote, now employs 43 people in the country, up from just five in 2015. M&G declined to provide EU-wide figures .
Many believe regulatory changes will lead to more job creation in the EU, especially any tightening of EU rules on outsourcing in asset management – an idea explored by the European Commission.
Mr Mackel said that while the UK would remain the dominant investment hub in Europe, the European workforce of asset managers would gradually increase at the expense of London. “It will be a slow erosion. The operations of asset managers in the UK and the EU will become increasingly separate over time. “