We trained the street': ING boss laments another small cap walkout

ING Investment Management (ING IM) will not change its preference for avoiding “;bidding wars”; for talent, despite losing its entire small cap team to Credit Suisse Asset Management (CSAM) last week.

Co-heads Issam Eid and Steven Ng, and analyst Rajeev de Silva, join a list of ING small cap alumni which now includes high-profile boutique operators (David Paradice, Ben Griffiths, Brian Eley, Peter Mouatt, Michael Glennon) and senior executives at other managers (Michael Courtney, Andrew Beirne, Greg Dearden). The chief executive of ING IM, Grant Bailey, said the team tendered their resignations last Wednesday, which prompted “;discussions”; but no significantly enhanced remuneration offer from their employer of the past three years. “;This was something of a personality issue, they wanted to be reunited with Stephen Giubin (their former boss at Macquarie Funds Management and new head of Australian equities at CSAM), and have the chance to rebuild CSAM’s equity business from essentially a zero base,”; he said. While observing ING had effectively “;trained the street”; of small caps in Australia, Bailey worried that funds management salary and incentive packages would “;become like the Sydney property market”; and be unsustainable once bearish conditions returned. “;Retaining good people is about an overall alignment of interests, which includes not only short- and long-term financial incentives but a comfortable culture,”; he said. “;Not everyone wants to work in a boutique-type situation, there are plenty of portfolio managers without a commercial bone in their body – ironically enough. The Kerrs and Antons get the headlines but the reality for most employee-owned businesses out there is pretty different.”; That being said, ING IM is continuing to investigate different ways to incentivise its staff. Its analysts and portfolio managers currently receive ING group stock as part of their packages but Bailey said the introduction of ‘shadow equity’ related to the performance of ING IM itself was a possibility. That shadow equity would not be related to a separately branded asset management unit, however. Late last year, Bailey surveyed consultants and customers about the possibility of rebranding ING IM – Spectrum Asset Management was the name being flagged – but the feedback was that it was unnecessary.