Copyright: David Lawson - Property Week Feb 1997Home page
But how qualified is the average surveyor to make this leap? Experienced staff have watched lucrative areas like agency whither while bright young graduates queue for jobs in burgeoning fund management departments. The secret is that many have specialised in areas like portfolio theory and value models - essential tools for fund managers but a blank spot for most surveyors. 'You must be able to understand equities and gilts as much as property to give clients a balanced appraisal,' says James Thornton, head of Savills Fund Management, which handles 400m pounds of assets.
This is becoming even more important as the industry moves towards sophisticated financial vehicles like derivatives. Dealing in these areas require another level of qualification to satisfy IMRO and the SFA. Newcomers are often able to meet these demands through long-established paths such as an MSc in property finance from universities like Reading and City of London, or a diploma from the College of Estate Management. Once into a career, however, things may not be so easy. Managing partners are keen to raise staff standards but not enthusiastic over allowing time off to study. The Investment Property Forum is concerned enough about the ad hoc nature of training and education that it is calling fro urgent reforms in a report due to be published this month
'There is need for a structured programme to rectify skill shortages and raise standards,' says John Story, chairman of the IPF education sub-committee.In the meantime, experienced surveyors should not feel they have missed the boat. 'You cannot consider becoming a fund manager until getting all-round property experience,' says Robert Peto, investment director at DTZ Debenham Thorpe, which looks after 1.5BN pounds of property investment.
Young brainboxes joining straight from college are only on the first rung of the ladder. Thornton points out that they would be expected to work through a firm accumulating experience in different departments like any other newcomer working towards RICS membership. Peto's rule of thumb is 10 years' experience before being able to take the reins of a fund. Nor does learning stop there. 'We are continually going on courses to gain more detailed understanding of bond and equity markets,' says Peto.
Philip Gadsten of Jones Lang Wootton Fund Management, which handles a massive 3BN pounds of assets, says the fact that there is no standard career path has opened the door to anyone with the aptitude to move beyond standard surveying skills. Knowledge of esoteric financial instruments is not essential, he says, as newcomers will work in teams which include specialists to provide this kind of input. 'But you have to learn to understand the language,' he says.
As the IPF study shows, that comes in many different ways. Gadsten, who spent five years with JLW Finance as part of his education, sends staff on Stock Exchange courses to help them understand financial statements. 'Surveyors have tended to blank out when faced with a set of accounts but when you have a discretionary mandate to handle property, you must be able to judge investments,' he says.
Thornton, who spent 15 years with JLW before moving to help build Savills' fast-growing fund management arm, believes that acquiring an MBA was an important part of his armoury. This kind of extra qualification could become essential in future for anyone aspiring to work in this area, says Peto. But which one? Gadsten believes there are not enough courses available with the syllabus to match what can be done through mixing and matching work experience and selective training. The IPF study acknowledges the quality of post-graduate degrees and diplomas but feels there is need for a more coherent structure within institutions and private practice, where most of the current training takes place.
Even firms enthusiastic about taking on non-cognate graduates with specialist financial training would like more input for those who do not travel this road. 'It is a pity that more emphasis is not placed on investment management during interviews for the test of professional competence,' says Clifton Brown. Such concern spreads beyond those in private practice. Martin Moore, managing director of Prudential Portfolio Managers Property, would like to see investment surveyors getting a lot more than a few lectures tacked onto degrees or a couple of hours a month in continuing professional development. He speculates that this may mean a separate qualification similar to the the Investment Management Certificate taken by fund managers. But he warns that some change must take place as the industry becomes more sophisticated and faces pressure from other professions.
No matter how important instinct and experience are in handling property portfolios, surveyors do not have a God-given right to the fund manager's chair, particularly as indirect vehicles swell in importance. Accountants, bankers and management consultants are already moving in, tacking property skills onto financial ones rather than vice versa. That may spark even more rumours of City-style salaries and bonuses, but it may not be surveyors drawing them unless the profession matches the demands of the 21st century.