The World of Investing 2023

From an investing sentiment, the last few years it has all been about private assets – whether you were looking at building portfolios for the institutional, HNW or wholesale market. And, where investing goes, distribution follows.

Initially, for in the institutional market, it was all about alternatives – be it PE,Venture or Debt (Australia does not really group Property or Infrastructure investing into Alternatives, as our global colleagues tend to). All three asset classes attracted new entrants from overseas, and caused existing providers to offer their products in sales channels that they had never previously considered, or within evergreen structures specifically for those needing more liquidity. That in turn offered an opportunity for the more nimble platforms,and as such, the rise of the independent asset consultant.

As allocations peaked for PE and Venture, Debt is currently having it’s time in the sun, although is a little more challenged by the prevailing risk free interest rate environment (as well as a huge amount of market entrants) than it has been previously. That said, the wholesale and HNW market are rapidly increasing their allocation to debt given their low base, both in allocations and in some instances, understanding of how the asset class can function in a diversified portfolio. In the institutional world, both niche and mainstream offerings are both still attracting interest, ensuring no end of interest in this asset class. As a result, there has been significant hiring across all channels.

As for Equities, it’s been tough for some time, although Fixed income is making a resurgence (particularly out further into the credit spectrum). In the institutional landscape, it’s been more about preserving market share in a period of continued market consolidation, and ensuring style diversification in portfolio construction, and holding off large allocations to passive portfolios. In the wholesale and HNW space, niche offerings are still highly desirable. Whilst it’s been a tough time for many equities managers, those with differentiated offerings continue to attract both talent and funds.

So what does that mean for career growth?

The most hotly contested roles are with those organisations who, in the institutional landscape, have a breadth of products to offer, so to increase the number of touch points on any organisation.

More broadly, reach into the HNW/Family Office/Private Bank space is the most highly sought after skill right now. Outside of the Private Banks, the world of the HNW/Family office market is hard to map and even harder to access, and so the ability to access those networks is deemed as being hugely valuable. Given the networks have only really been of focus over the last few years, individuals with long standing networks are rare. The career path into this space is also not as straight forward, with some of the more successful individuals coming from an institutional sales background, others from the wholesale market. What has become obvious to us in our discussions broadly across the market is that technical skills prevail.

In wholesale, the post royal commission market looks considerably different these days, and so team structures and client coverage have by necessity had to change too.. This has created opportunity, and those sales people who can take both a top down and bottom up sales approach are always in demand.

But all this, whatever part of the market you are in, has been dominated by a few things. Firstly, post COVID, there was a huge amount of hiring in sales, as during COVID was not seen as an ideal time to hire sales people.. so, there are many individuals who are only relatively new in their roles, and are not looking to move again quickly. There is also some conservatism in the market at the moment given nervousness around where the market is heading, but I have to say that is not equally shared, with some individuals seeing market instability as opportunity – and a time to get set and build relationships, so there is always something for everyone..

So, on balance, I think the next 12 months will have interesting opportunities for those who are bold.  We look forward to discussing this further with our network over the coming months.

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