What is it like to work at a sovereign wealth fund?
Just curious since I hear a lot about working at BBs and prestigious boutiques but not a lot about sovereign wealth funds.
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I have read that some of the SWF's in the UAE are awsome. They hook you up with housing, transportation, etc. Just what I've heard through the grapevine, don't quote me on it.
Following ! Would love to also here about experiences at SWF offices based here in the US.
Bump, would like to hear about anyone's experiences at Temasek/GIC as well as others.
Ive heard they don’t pay very well in the US (Temasek / GIC) vs other buyside opps. Canadian pension funds are good to work for in terms of work life balance but also pay below what you might be able to make elsewhere.
Middle Eastern funds - working in the region, not in the US - are good if you just want the pay and the perks. But you will work like a dog and you will not rise as quickly as the local hires. So be prepared for it not to be a meritocracy. But, you’re well compensated for it not being a meritocracy so maybe it doesn’t matter. Depends what your priorities are.
Would you have any approx numbers for the pay at the Associate/VP Level at the UAE SWFs?
I mentioned it down below, but at the Associate level in the UAE / ME funds, would be approx. $200-250k all in. ADIA / QIA are known to pay the highest and Mubadala the worst.
PIF's recruiter had called me about a role within the last year, which was around $225k for Associate / $275-300k for Senior Associate.
I have no idea on VP level comp or salary structure.
I would leave the pension funds out of discussion since those aren’t really SWFs / operate in a different manner.
Working in the US at these funds the positive is that hours aren’t bad, solid pay and ability to get promoted directly, particularly at GIC. The investments are more fund and coinvests, but I would say it’s a pretty good lifestyle job. In Singapore they only really hire locals so no point discussing.
Where you see a lot of US BB guys go is to Middle East SWF roles, particularly ADIA, QIA and to a lesser extent PIF and Mubadala. They have various teams and do mainly global investing rather than within the Middle East itself. ADIA in particular is known to hire a lot of expats.
Pay is good at these places but honestly not better than any decent MM shop in the US, around $250k all in for an associate, with Mubadala being lower. As a US citizen you don’t get the tax benefit, as you still need to pay US taxes on your income, though your effective rate might drop a bit. If you’re not a US citizen then that is 250k tax free which is fantastic. Hours aren’t that bad at most of these places, but the point on meritocracy is spot on. There are quotas for local hires so be prepared to have local analysts working under you who lack basic accounting skills and have a plethora of locals in the senior roles who don’t have much of an investing background either. PIF has a number of foreigners in very senior roles on the PE side, while at the others it is pretty difficult to rise up the ranks if you’re not local. That said, you’ll have to decide for yourself if you want to be working in Riyadh and ethically how you feel about working indirectly for MBS.
Most people end up staying for 2-3 years and then moving back to the US / to an MBA. As the good funds are in Saudi, Abu Dhabi and Qatar, these are lonely and depressing places to live for an extended period. Dubai is much better from a quality of life perspective, but that’s still a few hours from AD. The people I know at these funds (primarily ADIA and Mubadala) have all either moved back to their home country or are trying to.
Unfortunately these roles aren’t great from a US PE perspective for a few reasons. The business school exits also aren’t the best, with very rare placement to H/S. From a US PE perspective people at least will know the names of these organizations, but I think the experience is discounted substantially since it isn’t traditional corporate PE, lots of red tape, and Middle East as a region isn’t looked at that highly (even if you are looking at deals in developed markets).
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Great color. Thank you.
Any thoughts on repatriating (especially if you're coming from the US)?
No
Very curious about the Wafras and Adia's of the world, especially for anyone in real estate. Any data points would be much appreciated.
Teams aren't as smart as you might assume. They hire a lot of retards who have some sort of important family lineage which I will never understand.
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My understanding is that in a SWF the investment role is a lot more about asset allocation rather than asset selection that you might get to do in a traditional PE role. Some SWFs like Mubadala have evolved to build out a direct investment capability (Mubadala Capital) and manage third party money. However, for a number of the others it is about indexing say tech sector by participating in almost every pre-IPO round that they are shown or co-investing alongside large buyout funds.
Some lesser known SWFs like New Zealand Super Fund have been innovative in how they think about portfolio allocation.
One issue I have heard with SWFs investing directly is that they often can't take a majority stake in a company due to foreign investment restrictions in many countries.
would love to know more about the New Zealand SF - do you have any reading you can point to or otherwise share more about NZSF and their innovative approach?
My understanding of some of the innovations are: use of a passive, reference portfolio for the NZSF team to beat; focus on diversified risk rather than traditional asset allocation; use of tactical tilting. The article below also makes it seem like other, larger institutional investors that have followed this approach are: CPPIB and GIC. Does anyone know if that is the case?
A couple of other things that stand out is having a direct team (given the FUM) they manage and ability to move quickly.
New Zealand's Orr: One of the World's Most Innovative Investors | Institutional Investor
This Capital Allocator's podcast will give you a good overview for NZSF: Innovation at New Zealand Super Fund - Capital Allocators with Ted Seides.
How does one progress up the ranks at a SWF?
If anyone is interested in SWFs in Europe, one of the good ones would be LGT. Check out their website, culture, mission, etc.
We were on a deal with them a longer while back but only had positive experiences with them. Solid culture and team, maybe a bit slower than in the private world.
When you look at their impact investments and innovation portfolio you will be surprised what they are looking at and working on.
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