2006: Good year vs. bad year?

What was hot and what was not in the Scottish financial services industry over the past twelve months? Here's our considered opinion.

Good year

Fund servicing:

Fund servicing jobs may not be as well paid or prestigious as front office roles, but they are plenty of them, and their numbers are growing. Figures from Joslin Rowe suggest there were 30 per cent more asset servicing jobs in Scotland in 2006 than 2005. Increases of 5-10 per cent are already on the cards, but a company spokesman suggests this could easily turn into another 30 per cent rise by the year end.

Fund management:

Along with Scotland's asset servicers, Scots front office fund managers also had a bountiful 2006. Baillie Gifford attracted a whopping 3.1bn in global equity mandates, Fidelity International announced plans to open a new Edinburgh office and Alliance Trust revealed plans to build a team of fund managers for its new Hong Kong venture, based (surprisingly) out of Edinburgh.

Despite the deluge of positive developments, Richard Fletcher, managing director of Edinburgh headhunter Fletcher Jones, says fund management hiring wasn't noticeably frenetic. Next year is likely to be more promising, he predicts.

Leveraged finance:

Scotland isn't known for its position at the forefront of the burgeoning global leveraged finance market, but this could be about to change. The value of European leveraged finance deals reached almost 53bn in the first three quarters of the year, and banks in Scotland want a piece of the action.

Royal Bank of Scotland and HBOS currently have the lion's share of the Scottish leveraged finance market, and recruiters say English banks are muscling in. Lloyds, Barclays and HSBC are rumoured to be looking for talent.

Bad year

Private Equity:

Private equity globally may have been active, with funds raised up nearly 25 per cent to a gargantuan 186bn globally, but Scotland was far from the forefront of the action.

Recruiters said the Scottish market could be (and should be) hotter: "There are not as many deals coming out of Scotland as we would like, and so not as many jobs," says Fletcher.

Corporate Finance:

As with private equity, Scotland remained distinctly barren when it came to opportunities for front office corporate financiers. This may be just as well, given Scots corporate finance talent is elusive. Amanda Guthrie of HR Consultancy, tells us: "The market here produces few posts, and it remains difficult to find local candidates."

Aberdeen Asset Management:

Ok, Aberdeen Asset Management didn't exactly have a bad year, but there were a few wobbles along the way. Funds under management fell almost 4 per cent in the five months to the end of August, thanks to turbulent market conditions and rising costs following the integration of parts of rival Deutsche Asset Management. By December, however, all this was in the past as the company announced record fund additions of 5bn during the previous 12 months.

eFinancialCareers' editorial team will now be taking a festive break before returning in the New Year. A very Merry Christmas to all our readers.