To help anyone considering a career in funds we’ve put together a short series about just that…”Careers in Funds”. Over the coming weeks we’ll share these short and sweet blogs with you in the hope that you gain a greater insight into what it’s like to have a career in funds.
First up Sarah Kavanagh | Senior Associate | Barden’s Financial Services practice takes a look at fund accounting…
What is Fund Accounting?
Fund Accounting supports trading and accounting groups, such as pricing, cash & collateral management, Over The Counter (OTC) & settlements etc. Typical day to day responsibilities include calculating and reporting the NAV (Net Asset Value) of the fund. It is a deadline driven environment and very fast-paced.
A definition of the label fund accounting, as it is when applied to investment accounting, portfolio accounting or securities accounting, can read as the following “all synonyms describing the process of accounting for a portfolio of investments such as securities, commodities and/or real estate held in an investment fund such as a mutual fund, private equity fund or hedge fund.”
Careers in Fund Accounting (FA)
The FA market is booming! In a recent news article it stated that hiring rates in the first five months of 2022 were on average 27% higher than the same period in 2019, despite the economic pressures being faced by businesses here.
The Irish funds publication is good to stay as it is still relevant and discusses up to 2025.
Further evidence of this booming market can be seen in a recent publication from Irish Funds (a leading representative body for the funds industry)…
“Assets under Management are projected to grow by 5.6%* on a CAGR basis to 2025 with annual growth rates in Ireland of 10.76%** in the same period. Alternatives and particularly private equity/debt, infrastructure and other sustainable strategies will be key to this growth. Ireland as a domicile, and with the introduction of its new closed ended funds structure known as the ILP (Investment Limited Partnership), provide the ideal solution for Asian Asset Managers for their private funds which can be sold globally.”
In addition it states that Ireland is “the location of choice for > 250 of the world’s leading financial firms – including half of the world’s top 50 banks…”.
There has certainly been a shift in ‘popular’ ways of investing and as a consequence, different skill sets are needed for the FA professional. The latest shift seems to be a preference for a private equity (PE) fund type over a more traditional hedge fund type. For more insights into these different investment types see our blog “#1 Hedge Fund v Private Equity: Here’s how they’re different…by Barden.”.
Increasing Demand for PE Funds
One really important aspect that will only increase the demand for PE funds becoming more and more prevalent to Ireland’s fund industry is the passing of the Investment Limited Partnerships (Amendment) Bill 2020.
The Bill, which was brought before the Seanad in September 2020, overhauls the existing legislation to allow for the establishment of certain partnership structures (PE), typically used elsewhere, but until now unavailable here (Ireland).
In essence the Bill will make Ireland more attractive as a location for establishing private equity, real assets and infrastructure funds. Good news for business and good news for those paving a career in funds.
The Irish investment limited partnership (the “ILP”) is expected to become the fund structure of choice for many Asian investment managers, particularly those in the private equity, private debt, private credit, infrastructure and real assets sectors, and those with a longer term sustainable finance focus.
Within a funds company there are many different career paths, which is something we will discuss in more detail in the upcoming blogs in this series. We’ll touch on Investor Services, Financial Reporting, Compliance, amongst others.
Typically, those who choose a career in fund accounting have completed degrees such as commerce, finance, accounting. However educational background is not limited to these areas. We often find that those in funds come from many different walks of life.
We are also seeing an increase in professional accountants, who come from Big 4 backgrounds, going into Fund Accounting roles. We explore this more in a blog with Melíosa O’Caoimh, Country Head, Northern Trust Ireland, where we chat to her about her own experience of this in the past, and how she got to where she is now.
There can come a point for people when they feel they have exhausted all aspects of NAV calculation and may look for alternatives. FA is a routine based, systematic, accounting type role. However, FA is just one part of the puzzle.
Asset managers, banks and FS institutions look for a wide variety of different skilled individuals. The experience and skills you gain in FA will open opportunities in transfer agency, trustee, custody, pricing, AML and compliance etc. The experience could also be transferable in a client relationship role within any financial services company.
Stay tuned…in this blog series we will cover some of the other aspects of other typical positions that crop up in the FS sector.
Sarah Kavanagh is a Senior Associate with Barden’s Financial Services practice. She is an expert in financial services careers, predominantly within the asset management and fund services space.
She is a UCC grad, holding a Bachelor of Arts (B.A.) in Economics & Psychology, and a MBS in Business Economics. She also went on to study and complete the Qualified Financial Advisor, Financial Planning & Services exams with The Institute of Bankers.
Sarah joined Barden in January 2020 and prior to that worked in various aspects of financial services including banking and asset management.
Get in touch with Sarah at email@example.com.