London Mayor Boris Johnson has thrown his weight behind an industrywide campaign to get more young people in the U.K. into the financial services sector.
The brainchild of Andrew Formica, CEO of Henderson Global Investors, Investment 2020 gives university graduates and other young people the chance to spend one year at a participating money manager, with opportunities in London, as well as Edinburgh and Aberdeen, Scotland. These trainees come from diverse backgrounds, with experience in law and sports science as well as economics and math.
“It is a personal ambition of mine — we would like the investment industry to hire 2,020 trainees by 2020. That is 4% or 5% of the investment management industry, should we achieve it,” Mr. Formica said at a lunch Wednesday to mark the initiative's one-year anniversary as an industrywide campaign. “It is less (about) who you know, but what can you do for us.”
Mr. Formica launched the initiative at Henderson four years ago, and has since employed 4% of his workforce through the program. “This is an industry-led initiative — it started here at Henderson … but it is bigger than just one firm and one person,” he said.
Investment 2020 has the backing of 20 money managers — and five more are set to sign up, Mr. Formica said. Participants include BlackRock Inc., Aberdeen Asset Management and Standard Life Investments. Last year, 87 trainees took part, and 120 positions have already been pledged by firms for 2014.
And now it has the public backing of Mr. Johnson. “We support apprentice schemes like this — it is a fantastic thing you are doing: Apprenticeship is not just oil and rag,” he told attendees at the lunch. He cited record youth unemployment in the U.K. and poverty across London boroughs. “This is quite an extraordinary time to be in London, and part of London's government. London, by the way, remains the financial capital of the world. And yet there are people living in this city who do not participate in that excitement and wealth creation and are not seizing the opportunities.
“Investment 2020 is helping people growing up in Britain and London who might not think of themselves as being natural fits for the financial services industry and are helped into it by this scheme,” Mr. Johnson told a small group of journalists after the event.
At the lunch, Mr. Formica highlighted the success of the U.K.'s financial industry. “(Money management) is right at the heart of the success of the U.K. and of London as well,” he said. “We get people to keep their financial goals, to make sure that when they retire, they have a proper standard of living to enjoy.”
“We manage two very scarce resources: capital and people. It is really important for us to make sure they are managed” properly, Mr. Formica said.
Investment management represented less than 1% of U.K. GDP in 1960. Now that is more than 40% and growing, Mr. Formica said.
But the key to success of the investment management industry, Mr. Formica said, is its people. Youth unemployment is a “massive problem for this city. We run the risk of having a lost generation, people who struggle to get their first foot on the ladder.”
The key is for the whole industry to play a role. “It is easy to sit here and say it should be the government — and it should, but we as an industry have” a role to play.