Sunday 11 December 2016

Handling funds is not just a job, its a demanding lifestyle

Published 19/05/2011 | 05:00

A hedge fund trader writes:

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'There was a recurring joke during popular '90s sitcom 'Friends' whereby none of his friends knew exactly what Chandler Bing did.

Working in the fund administration business in Ireland is a lot like that. Most people simply nod and say, "so you work in a bank" when you attempt to explain your daily life; and yet 11,000 people work in the industry -- surely one of us has explained it properly?

The term 'hedge fund' is often bandied about when people talk about the financial services industry in Ireland but our core offering to multinational companies, other than a favourable corporate tax rate, is the function of administrator.

There are three main offerings an administrator can offer prospective clients: custody, fund accounting and shareholder services (there are many more on offer such as trustee function, tax, financial reporting).

Two out of three core functions are back office ones where there is no contact with investors -- buying the underlying stocks that a fund holds and ultimately producing the Net Asset Value or NAV that an investor receives (to the layman that's the price to buy one unit in a fund).

The shareholder services function is very much a dual role as administrators deal with both client and shareholder. They take in the money from investors and fund managers and then spend it on underlying shares and stocks.

While the core functions are very different they do have a common trend running through them: time.

Time is the most important thing that funds can't buy; the thought of telling a client that the price for the fund is not yet ready to be released or that their cash flows are late will send the most seasoned hedge fund professional into a panic.

And that's why working in fund administration in Ireland is not simply a job, it's a lifestyle. It is very rare to find someone working a 9-5.30 shift; there is an unspoken expectation that you are there until you get the job done.

I was recently in a hospital in Cork and the person I was visiting was due to get some medicine administered.

The attending nurse duly informed the patient that her shift had ended and that the next nurse would complete the seemingly onerous task.

This could never happen in the funds industry and if it did there would be instant black mark against the individual, without giving any consideration to the fact that the employee involved had probably worked non-stop all day, had little or no social interaction with colleagues and had partaken of a half-eaten lunch at the corner of their desk, the one break in the day.

Of course, the draw to the industry is the handsome pay that comes with the pressure and responsibility. The average salary of a fund accountant is anything between €40,000 and €80,000, depending on experience.

American banks setting up shop here in Ireland may bring the promise of decent salaries but they also bring the same American work mentality.

Like a fast food chain, the fund service industry is all about service -- what the clients want, they get.

Despite the recession, the financial services industry continues to grow, albeit at a smaller rate here in Ireland.

The relatively high number of jobs in the industry means that there are high levels of turnaround.

The long hours can have an effect on people's personal lives and, like an abusive relationship, people move from one company to another, similar company, using the training-in period as their down time.

The Irish fund market remains the epicentre for fund managers across the globe and is seen as a focal point for fund managers from European, UK, US and Asian investors to set up their business.

It remains an industry of huge importance to the economy and continues to grow -- despite the fact that most people have no idea what we do!'

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