What is a Pension Fund Manager?

Pension & insurance fund managers invest large sums of money conservatively for clients saving for retirement with a view to making it grow. They need to safeguard the value of the pensions (and are therefore required to take low-risk investment strategies). At the same time, they need to earn a return that will offset inflation (maintaining the real value of the pensions) and generate a profit for the fund management firm.

Fund management is the professional management of various securities (shares, bonds etc), assets (e.g. property), to meet specified investment goals for the benefit of investors. In the case of Pension and Insurance Fund Managers investors will be institutions (insurance companies, pension funds, corporations etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. Unit trusts).

The provision of ‘investment management services’ includes elements of financial analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. Investment management is a large and important global industry in its own right responsible for caretaking of trillions of pounds, dollars, euro, and yen.

Each fund manager has their own unique style. Many fund managers buy and hold fixed income securities including mortgaged-backs, corporate bonds, munis, agency securities and asset-backed securities. Others focus on equities, including small stocks, large caps and emerging market stocks.

To get into fund management a good place to start is in a bank trust department, in a state and local pension fund or in an insurance company. Many people cross over into fund management after getting years of experience on the sell side of the business in investment banking. Perhaps one of the best ways to break in is on the marketing side or through prime broking.

If I work in pension / insurance fund management what will I be doing?

Pension / Insurance Fund managers invest money on behalf of their clients. Working as a fund manager used to involve everything from analysing and investing in products to persuading new clients to put money into the fund.

Today, however, there is more specialisation, with fund managers focus purely on managing the money, while an army of research analysts and salespeople are employed to do the rest.

You could work for two basic kinds of fund:

1. Passive funds: also called ‘index trackers’. Fund managers select a portfolio of assets whose value will track that of a financial index. A fund that tracks the FTSE 100 index, for example, will aim to follow the value of the UK’s 100 biggest companies. The investment decisions of passive funds are typically made using computers, meaning fund managers working on them have a relatively easy life.
2. Active funds: active fund managers buy and sell financial products in an attempt to outperform the rest of the market.

Analysts working in fund management help steer fund managers in the right direction when it comes to choosing assets to invest in. They scrutinise companies’ results and meet with management to discuss strategy. They then write lengthy reports detailing their conclusions.

As a fund manager you will have a “Philosophy” which refers to your style of investment. For example:

1. Do you buy growth or value shares?
2. Do you believe in market timing (Technical Analysis)?
3. Do you rely on external research or do you employ a team of researchers?
4. Do you make money in a bull, bear or sideways market or rely only on a bull market?
5. How do you decide what to buy and when to sell?

You will need to demonstrate your philosophy to your prospective employer. It is helpful if such fundamental beliefs are supported by experience and research. This will make up most of your daily routine as a fund manager.

How do I get a graduate scheme / internship / entry level job or career in Pension / Insurance Fund Management?

Obtaining a graduate scheme, internship or entry level role in venture capital can be very challenging and competitive – though very achievable by getting your application, CV, interview and general approach right. You can guarantee that ninety percent of applicants for venture capital roles will not know how to apply, so getting your application in the top ten percent makes things a lot more achievable.

Approaching the company in the right way will make all the difference. Combining the right approach with a strong interview (and in some cases assessment centre) writ a strong focused tailored CV will go a long way. Make sure you have gone through the free videos on this sight by entering your name and email address in the top right of this screen underneath the video. Once you have filled this in you will have instant access to everything you need to secure your career in venture capital.

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