Snobs of the Square Mile

Finance wasn’t always so posh. And top firms once again want talent from all sides of the tracks.

Illustrations by Ben Jones

Illustrations by Ben Jones

Britain’s obsession with class is a source of global fascination. Television epics like Downton Abbey and The Crown testify to this.

While stratified societies make for cracking costume dramas, they also reflect in the hiring practices of modern-day asset management firms.

Conversations about gender, ethnicity, sexual orientation, and disability are happening across the City of London, and most campaigners and companies would agree that there is plenty more to do.

Social mobility is a recent addition to the diversity agenda. Ideally, employers embrace people from all backgrounds, and professions aren’t exclusive to those born privileged.

Most fund firm bosses will say diverse workforces benefit clients and reduce groupthink, but many do not measure their class makeups or track outcomes.


The chief executive of Aquis Exchange, a London-based trading venue, thinks financial companies in the City aren’t “particularly good at” social diversity. “Anybody, from any background, should have the right to succeed,” says Alasdair Haynes. “If you go back to the days where the dominant workforce was male, privileged, and privately educated, we had opinions that were very different. When women came into the City, they changed the way that people behaved. That was good for the industry. Social diversity gets you a different breadth of opinion, with people kicking the tires in a different way.”

City of London employers still tend to focus on just two British schools in graduate recruitment. The universities of Oxford and Cambridge drew more employer visits in 2017 than the other 118 visited U.K. academic institutions combined, according to a Social Mobility Foundation survey of roughly 100 employers. This means recruiters are more likely to encounter students from wealthier backgrounds. Six in ten U.K. students admitted to Oxford in 2016 came out of state-funded schools, versus 90 percent of all new undergraduates nationwide.

Given that recruiters across all sectors pay Oxbridge special attention, it is perhaps unsurprising that a large contingent of fund managers attended these institutions. Institutional Investor looked at the ten best- and the ten worst-performing global equities funds for the five years to December 2017. Of these 20 funds, eight were managed by Oxford or Cambridge alumni.

But should investors care? Well, a 2017 survey conducted by fund ratings group Citywire suggests that the best fund managers in the U.K. were educated at the University of Southampton, HEC Paris, and the University of Bath — not Oxford and Cambridge.

Realizing they might be missing a trick, some fund firms have taken action, expanding the list of preferred universities and disciplines for traineeship programs. Regardless of where and what new graduates studied, companies including Janus Henderson, M&G Investments, Northern Trust Asset Management, Russell Investments, and Schroders will consider them.

“We’re not saying you need a first in economics to succeed,” Wayne Bowers, Northern Trust Asset Management’s CEO for Europe and Asia, explains. “A basic understanding of economics helps, but political history is also important.”

Some asset managers are also looking at trainees who don’t have degrees, and are using more complex metrics than GPA to assess hardship, resilience, and determination, according to the Social Mobility Foundation. Prospective candidates may be asked about their parents’ occupations, the type of high school they attended (private or state), whether they were eligible for government-subsidized school meals, and whether they were the first in their family to attend a post-secondary educational institution. “By using contextual data, you can put flags against names,” says Kathryn Davies, the foundation’s employer index manager. “Three or more flags might mean you will be fast-tracked or looked at again.”

Degrees aren’t required for certain trainee programs at two U.K. giants: Janus Henderson and M&G Investments. “Social diversity is important to us,” says M&G chief executive Anne Richards. “A diverse workforce, where different backgrounds and perspectives are valued, helps us achieve the best results for our clients. The industry has some wonderful examples of people with multiple degrees who are great investors, as well as others who have gone into investing straight from school and also flourished — there is no cookie-cutter approach.”

Under Richards’ leadership, M&G aims to broaden its talent pool, including via student events, apprenticeships, and a policy of reimbursing candidates’ travel costs to attend interviews and assessments. The company’s apprenticeship program includes a pathway to portfolio management.

Janus Henderson co-CEO Andrew Formica took such a path. He rose from trainee to chief executive of a global asset management firm, and in 2013 co-founded Investment20/20, a program to bring more diverse talent into the industry. “I came from an average background,” Formica says. “I was sponsored by a company to go to university and I worked for them in the university holidays. When I left university, I joined them. It is the same company that I work for today.”

Formica’s peers are coming around to what he knows from experience. Managing money is a privilege of those who do it right, not a right of the privileged.