SPEAKER_02 0:03

The OneSearch Podcast. Insights and opinions on the subjects that matter. In global infrastructure, financing and investment. With the OneSearch Credit Practice.

SPEAKER_01 0:20

Welcome to the uh the OneSearch podcast. Uh, this is our sixth podcast now in the series, still talking about compensation in the infrastructure market. We have we are the infrastructure credit practice. Uh what are we, G?

SPEAKER_00 0:34

We're the most diversified credit practice at one several.

SPEAKER_01 0:38

No, no, no. Try again.

SPEAKER_00 0:40

Quite diverse.

SPEAKER_01 0:41

We're the most diverse. We are also diverse. We've had this conversation before. Podcast two or three, I believe. But uh, we are the most diverse uh credit practice. However, I think the the conversation that we're having today, which is about attraction and retention, very pertinent conversation, especially around bonus time, which is what in many uh of our institutions in our marketplace in the infrastructure investment world have been recently going through in what is, frankly, peak infrastructure recruitment market, I think. It's certainly in my 20 years in the space, hugely topical conversation around what are these businesses doing to attract people? What do they need to do to attract people? What are they putting in place? What's successful? What might be less successful? And then retention of people, existing talent. How are businesses going about keeping their top talent and stopping them from escaping through the door? Look, in this conversation, we're going to have a discussion across the team with specific reference points mainly to the credit side, but it's, as I was saying before, relevant across the piece, whether we're talking about equity investment, credit investment, portfolio management, uh syndications, whatever you like. Guys, who's going to start me off talking about attraction techniques, strategies that they're seeing uh at the moment in this market?

SPEAKER_00 2:03

Um, where to start? There's a lot of things you can do for attraction. For me, I know that we spoke about this before. We've had a lot of success with one client in particular. Um, Dan's obviously very familiar with them, it's a project finance bank. In the world of where everyone's scattered across the states, flexibility from working from home or even relocation packages. Believe it or not, there are few firms that won't have give them a relo or at least a sign-on to help them pick up and move to a different state. The client that I worked with, um, people were genuinely really happy that they were generous and getting them over to New York. There are also clients I work with that won't provide that, and it's not the best look. So I think that's definitely something that attracts candidates that I've worked with.

SPEAKER_01 2:50

I've seen it, I guess, as a pretty standard thing, right? If you're going out to attract uh a talent in a certainly in the situation that we're in right now where strong talent is in short supply and very high demand. To me, that would be a basic staple point relocation.

SPEAKER_00 3:05

You'd be surprised that there are banks that won't offer that. So I think that's definitely something of attraction. And then everyone I talk to is asking working from home, right? Everyone's working from home. Obviously, I think a lot of people have proven that they might even perform better working from home. They're less distracted. I mean, listen, everyone has their own opinion. I'm happy to hear your stance on it, Namisha and Mercedes. But everyone I speak to is asking, okay, you know, job looks interesting, but am I going to be in the office once everything's said and done? So that's something I'm seeing.

SPEAKER_01 3:35

So of all the techniques that we see for attraction, um, which we'll talk about, you know, um, you might immediately jump to, I often do, immediately my mind jumps to, okay, well, buyout bonuses, guarantee bonuses for the first year because people are taking a risk, making a move. My mind goes to those financial aspects, just be probably years of having that beaten into me uh by candidates. But do we think that, and Namisha, I'll ask you to start with, do we think that flexibility to G's point is overtaking all of those financial aspects? Is this a post-COVID phenomenon starting to crystallize?

SPEAKER_06 4:11

Yeah, definitely. I don't think it's necessarily overtaking those aspects. I think those aspects are still very important, um, those financial aspects, but I think it's now where it used to not be of importance, it's now up there with being as important as those aspects. And I think it's going to be really interesting to see how different institutions combat this because you've got the funds and you've got the banks. We've, I think we've we've seen in the past that the funds are probably more flexible in what they've what they've done. That's what I've seen anyway, by speaking to candidates, banks are less flexible. And I think it was quite a worry when all this kicked in about a year ago, especially for those big PF institutions, I won't name names, but those sort of Japanese institutions, etc., how are they going to actually combat this work from home, which is the polar opposite of what their culture stands for, which is very much FaceTime. So I think it's going to be really interesting to see how those guys adapt. Um, and I think that's going to be something that, yeah, I mean, if they if they physically can't adapt going back to work and it's going to be, look, you need to be back five days a week, like Goldman Sachs. Um, I think it's going to be difficult to attract people to them. And I think the other interesting point is the seniors versus the juniors. I think they will look at it in different, different ways in the market. So I think the junior market will want some flexibility, but will want institutions to also have some requirement to go back into the office so they have that culture still. Um, and people are there and they can learn and they can develop because they're still at the start of their career. Whereas the seniors are probably comfortable with doing three, four days um at home a week. So I think it's going to be really interesting to see how how different institutions institutions combat this. Now things are sort of opening up.

SPEAKER_01 5:56

When I think about flexibility and people performing brilliantly well and in a in a flexible, agile environment, I think about Mercedes Perez, who uh who operates in a in a in a flexible way, in an agile way, uh uh working mother and um excellent mother, excellent wife, and excellent recruiter, all in all mixed into one. So let's uh let's ask Mercedes Perez what she thinks around flexibility, specifically in the the roles that you're recruiting uh these days, Mercedes, the clients that you're working with, how big of a as an attraction technique, how how significant is flexibility versus all some of these other you know financial aspects?

SPEAKER_03 6:37

Yeah, I think it's um you know how my colleagues discuss um very important, especially, yes, when it comes to to women, to the point that down to the negotiation, it's what the the candidates are telling in Mercedes. Can you make sure, please? Can you triple and quadruple check that I have this flexibility before you know they even send me an offer? So it's it's very important before they you know move. That's interesting.

SPEAKER_01 7:03

So sorry, Merc, I just want to interrupt you that. Why is that? Do you think people are worried that firms might tell them there's flexibility and then not deliver it in reality?

SPEAKER_03 7:12

Uh yeah, I think it's just a very gray area. So they want to make sure that the routine that they have in their life is just gonna be be um doable with this new role. And obviously, it's an unknown, right? So you want to impress people, but at the same time, you need to kind of manage your life. So I had one candidate who is is brilliant, you know, and she and then the client loves her. So she she just wanted to make sure. So we had a conversation, I had a conversation with HR, a half an hour conversation with HR, where they said, look, we'll we'll do our best. Obviously, we don't have uh a work from home policy yet, but at the same time, you can read between the line with COVID and all the changes that we're gonna have to create one. And at the moment, um, they're currently doing these um surveys throughout the whole bank, this particular bank. They're doing surveys to help them understand what their employees want and also at different levels in order to help them create a policy. So um she was like, but Mercedes, we can't give this candidate right now something in writing because we just don't have a policy and we're just and everyone's just waiting to see what other banks do and just kind of adapt accordingly. But they they do know that they have to um be flexible at the end of the day. So this HR was, you know, and and when HR is telling you to read between the lines, it's kind of like, okay, fine. So ultimately we were able to get her um over the line and HR spoke to the candidate and were able to say, look, we can kind of discuss things things verbally, as and when um, you know, uh between now September to December when we make the policy and and things change. So so yeah, I think it's it's very important.

SPEAKER_01 9:13

It's look with the the cats out of the bag now, isn't it? Uh people it's now people have realized that you don't need to be in the office. I think there are some jobs probably where you do need to be. There are some people who want to be. That's a different story. And I think that big companies will have to adapt. Shortly, we're gonna speak to Niall Mills, who's the uh the global head of infrastructure at First Sentier investors, and we're gonna ask him for his insights, leading a team. One of the insights will be around getting that balance right in terms of there'll be some people in your business who do want to spend their time in the office, some who don't. How do you manage that when you're trying to run a team, run a business? You know, so to your point, Mercedes, we're in a very difficult moment for HR departments and businesses to handle because we're not quite there yet. We're not back into the new world that is going to hopefully emerge post-COVID, but they still want to hire people, they still want to hire top talent. A lot of that top talent's looking for commitment on flexibility. So, as you as you put it, I think it's a bit of a bit of a gray area. People are having to have conversations around reading between the lines. Guys, tell me, I mean, before we move on, on that financial aspect though, when it comes to you know old school attraction techniques, maybe a blunt instrument of uh paying out guarantees, buying out people's um compensation from their previous role. What are we seeing there?

SPEAKER_06 10:33

I think by buyouts, we don't tend to see cash buyouts often in the debt market. Um, to be honest, I I haven't seen it. I think more so what happens is you'll be offered a role and then wait until you receive your bonus um and then start the role after after that. So that's more so what I've seen on on the cash part. Obviously, stocks they do get bought out, and that that's fairly standard. But on cash buyouts of bonuses, I don't see it much. Not not saying I haven't seen it. I have seen it in in some cases, but I wouldn't say it's common. You don't see sort of banks or funds writing big checks to get people on board sooner than waiting for their bonus.

SPEAKER_01 11:14

What about a what about guaranteeing the first year's bonus once the person has started? I mean, that's something that I've certainly at the more senior end seen quite a lot. And frankly, you know, depending on the institution and what they can, the promises they can make is reasonably commonplace. But what are you guys saying?

SPEAKER_03 11:33

Yeah, so for MDs, they the first year is usually guaranteed, and then um employers usually defer a portion over a few years to retain that MD. And so a typical bank would defer about 30% of a 300 uh thousand pound bonus. Um, banks find this a little bit harder to do than funds do.

SPEAKER_01 11:54

They they find guaranteeing uh more difficult.

SPEAKER_03 11:57

Yes.

SPEAKER_01 11:57

Well, absolutely, they've got the regulator to worry about, haven't they? And um, you know, we can get into uh you know when we talk about retention, uh absolutely deferral of bonuses will be will be an item on that particular agenda. But more junior folks, uh, you know, when we get in out of the MD category, uh, I take it, guys, we're not seeing uh bonuses guaranteed too much.

SPEAKER_06 12:17

No, not from my side. I think even at the director level, I did quite a few director hires last year. It it just wasn't wasn't something. Um it's all I think what's important is people understanding how they can achieve their bonus and what's the criteria in order to be able to achieve that and are there any caps? But I haven't seen any any bonus guarantees from my side.

SPEAKER_01 12:38

G Star, you placed a senior director last week in a major uh project finance bank in New York. Did you uh did did you come good for her and get her a guaranteed bonus year one?

SPEAKER_00 12:46

Did not.

SPEAKER_01 12:48

Sorry, that's a terrible question. Um but you did get you did get her a a way above market base salary. I I I know. And um, you know, the the fact of the matter is that it would have been impossible for you with that particular bank's policies, uh, in line with uh as Mercedes and Nemitra have pointed to, uh, many of the the banks within Project Finance you know making uh uh you know an official guaranteed uh bonus very few and far between. I want to be clear when I'm talking about senior people coming on board and getting uh their their guarantees for maybe year one or even in some cases two or three years, pretty much exclusively I'm talking about uh uh debt funds, institutional investors, opportunities on the buy side where there's an uh, you know, the the ownership structure, the independence of the organization uh uh is slightly different to being a bank, and they tend to uh have a greater freedom to do what they want in that respect. Organizations that have attracted talent, people that have worked for organizations for some time, the businesses that you guys are working with, the people that you're talking to who perhaps are starting to explore the idea of moving on to a different institution. What's holding them back? What have the firms done? What strategies are in place to make people not want to leave? You know, I'm sure all these institutions are trying their best to create a good, positive workplace, uh, to provide a great deal pipeline, to do all of those things to make people happy and fulfilled in their work. But what else do these institutions in infrastructure investment do to try and retain their talent?

SPEAKER_00 14:29

I can pop in on this because I thought this was interesting. They had someone that actually, Dan, you worked with regarding their garden leave. And this is the first time I've ever heard this before. And I think this is actually something really important for people who are looking for new jobs to read their offer letters and read the fine print. Don't just sign the offer letter, send it to your recruiter, have them look it over.

SPEAKER_01 14:48

Send it, send it to your lawyer if you want. But if you really want an expert, if you really want an expert to to give you an opinion, send it to your recruiter. You could send it to me.

SPEAKER_00 14:59

We have that service here.

SPEAKER_03 15:01

It's a it's a contract reading service.

SPEAKER_01 15:03

Absolutely right.

SPEAKER_00 15:04

Now we know. But Dan, you had mentioned there was someone who had a like a year-long garden leave.

SPEAKER_01 15:08

Well, I think there's I think it's exactly so. There's a difference here, frankly. I think that you'd rather have a year-long garden leave because then you'd be getting paid for it. The insult in that particular case was that look, we're not going to pay you for longer than the actual garden leave, which in America is very short, but we're gonna uh still have power over what you can go on to do for the next 12 months. Now, it becomes a legal minefield because you've got to ask yourself how enforceable it is. Will a court really enforce it? Different states in the US, different uh likelihoods of success for the firm that's trying to enforce it. It depends what the person has done wrong, technically, within that, the the confines of that non-compete. But in the case you're referring to, it was someone who'd been, I mean, essentially been given a contract that specifically said, if you leave us, you cannot join XYZ firm for uh for a period of 12 months. It was absolutely black and white, and that person was therefore scared off, could not progress with that opportunity because of that clause in the contract, which frankly they had said to your point, G, they were not even aware existed. So, so I just want to make this point, G. You've made a great point there. The point at which attraction and retention interfere with each other in the sense that if you have read your contract, as you would expect, as a basic function of someone that's uh that should be getting offered a job a great job in a in a world-leading infrastructure fund, that the the retention tool that you've built into their contract is actually uh a push factor against um being able to attract them in the first place. Do we see, Namisha? Let me ask you in that banking market, do you see any other things that banks might do that they try to use as a tool to retain people that actually then they create a reputation that stops people wanting to join them?

SPEAKER_06 17:07

Yeah, so clawbacks is obviously one of those. Um we had an example recently actually where someone came in and left their job within six months and they were bought out of their bonus. Um, so they then had to pay back that bonus that was bought out um because they left within a certain period of time. So yeah, I think we see see clawbacks quite a lot, and there's certain institutions in particular, um, one debt advisory business that I know of that yeah, their clawbacks are pretty punchy. Um, even sort of two years down the line, you're still basically paying back if you leave. Um, the the figure, the percentage gets lower, but um, yeah, in in this particular debt advisory shop, two years on you still have to pay back 25%. Your most recent bonus, you have to pay back, um, I think it's 50%. So it's it's pretty punchy figures and really is a massive retention figure because someone isn't going to leave if they're having to pay that cash figure back.

SPEAKER_01 18:10

Do we see that a lot? I mean, yeah, I I I know who you're talking about. And um, you know, those types of, I guess you might say, uh sort of bulge bracket boutique banks known for MA, debt advisory, very aggressive behavior that we expect from those sorts of institutions. But I can only think of a very small handful. Is it something that's become more widespread? Are you seeing mainstream project finance banks now uh um imposing clawbacks?

SPEAKER_06 18:39

Yeah, well, I think when they are giving you a when they're buying out your bonus, then there is a clawback um in there. So obviously we don't see buyouts that much as we discussed, but when there is a buyout, then obviously they put a clawback in in place to protect themselves. But um, yeah, I don't I don't see it, don't see it massively in the project finance market.

SPEAKER_00 19:00

But I'll agree with you because I've seen that as well in that one instance, right? Yeah. Or when they guarantee a bonus or they give you a sign-on, they that person couldn't move because they would have to pay it back. And she joked, being like, I already spent the money, so no can do.

SPEAKER_05 19:15

Yeah.

SPEAKER_01 19:16

Exactly. Well, indeed, and and paid the tax on the bonus as well. I mean, does the we could get into that, couldn't we? In terms of what happens then when you've paid the tax on it, and there's all sorts of mechanisms that have got to be uh got to be dealt with. So people clearly worry about if I'm if I've been paid a bonus, but it's not technically mine yet. I've got to wait another couple of years until it's technically mine, and I'm not allowed to leave in that in that time frame. Um, how successful do you think that is, uh, Nami? As uh I mean, do you think that does dissuade people from leaving?

SPEAKER_06 19:49

Well, in that one example, no, because she left after six months. Um yeah, it was just it didn't stop her at all. But then with the other example I use with the debt advisory um houses, all those bold brackets, I mean, it's a massive consideration, right? You're talking about huge sums of cash um that you're having to then pay back. And yeah, I think that is gonna retain someone because they're not gonna want to have to pay back X amount of uh we're not talking about sort of 10,000, 20,000 here. It's it's huge sums of money that they already have been paid and as G said, have probably spent or earmarked for something else. So returning it is not gonna be an option. I think what they then expect is their new employer to take on potentially that cost, which I don't know how realistic that is, to be honest.

SPEAKER_01 20:37

God, if it was all I can think of when I when I think about these clawbacks is me in my 20s and what would happen to me if I was in that tonight, uh the money would be gone. The money would be gone very quickly after having been paid. I mean, essentially they would just own me for a couple of years. I wouldn't have anywhere paying it back unless I could unless I could get bought out. I mean, that'd be the great thing, right? Um, but look, I know people from these institutions that you that you're that you're thinking of, and I know that they are they're pretty smart. They will put that money aside, they'll put it into a short-term investment. Uh, they will genuinely not regard it as being their own until the the period of the clawback is done, and and maybe that works out well for them uh if they invest it well. Um it's even uh it's an even bigger sum by the by the time they can go off and spend it. What else? What about uh, I mean, clearly the from a from a buy-side perspective, and we're not going to labour the point on Carrie because we've had a whole podcast on Carrie, we've talked about it, but surely that's the ultimate retention tool, right? You are in it for the long haul because you've got carry in you know, in the fund, and you in the full you know, in the in the fulfillment of time, um, upon the exit, you will share in the value that's been created. You surely if there was a a ranking here of retention tools, carry or L tip, as we would say. long-term incentive would be king, right?

SPEAKER_06 22:02

Yeah, yeah, definitely.

SPEAKER_01 22:03

Because it's a positive retention tool, isn't it? It's not a punishment. It's a it's saying to people, here's what you've worked hard for, here's what you should have your eyes on, here's what you should be focused on in the long term. You're going to have this. Um and certainly from my perspective, that's the that's the ultimate retention tool. And it's the ultimate alignment tool in terms of from an investor's perspective being aligned with with your investors, frankly, and everyone being focused on the same definition of success. Before we go to before we cut to Niall Mills and ask him, you know, from the perspective of someone running a business what what what he thinks and and maybe how some of these concepts work in in his in his daily life and in running his a very successful business. I notice sometimes a lack of alignment in the market in terms of people's job titles. And it makes me wonder when I think when I look at the businesses who seem to promote people quite early they also seem to be the businesses that struggle to keep people. Maybe they're um real targets. Maybe they're the sort of business who train up great people and then lose them to bigger firms or something like that. Is that is that just a coincidence or am I seeing you know do you think that I might be onto something there?

SPEAKER_00 23:22

You might be onto something but I think it depends on the platform, yeah. I mean some of these places I hate that I can't say the name but there's that one project finance bank that you know they they promote quickly but they also train fantastic project finance candidates and they lose people really quickly because they're high caliber but at the same time they do promote quickly but you do see a max exodus of those people going to buy side. So I think it depends on the platform.

SPEAKER_01 23:50

What what are you exactly talking about if you can say without names I mean what you're saying then is that whoever bank is that you're referring to and there's probably loads of people in different banks out there listening to this podcast saying yeah that's us. But what you essentially what you just said there is well it doesn't work. It doesn't make any difference you can call someone you know global head of whatever you want if they've got four years experience they're still they're still an associate and they know they are and they and they'll still leave anyway is that what you think?

SPEAKER_00 24:18

Yeah unless like you really think the title is everything which uh I don't always agree with but there's an argument there.

SPEAKER_01 24:26

In in I mean look that's my view that that's you know just the fact that you're called the whatever kingmaker in chief four years Dan you can call me a janitor but if you want to pay me a million a year like I'll be called a janitor. Well I do want to pay you I do want to pay you a million years I do that is what I want to do. But um yeah it'd be strange wouldn't it on the website uh the the the fact is look someone with four years experience being called kingmaker in chief four years experience if they if that is enough to keep them happy then that's a strange character isn't it the kingmaker in chief is a strange character and you know you would I I look does anyone argue with the with the assertion that it just doesn't work over promoting people no I agree I do think some candidates then are slightly not I wouldn't say deluded is the wrong word.

SPEAKER_06 25:16

I just say that they're said it now Nami Their expectations are such where they wouldn't want to move for a lesser title. I mean I've definitely come across that um I'm I'm sure you guys have as well where they're called a VP um they've got four or five years of experience and that's what they think they are but if they want to go move to let's say they're in a bank they want to move to the buy side the the reality is you're then competing with a lot of other VPs in the market who could be six seven years of experience and they're just operating at a different level yeah I guess there's some some disagreement to that as as well.

SPEAKER_01 25:54

Yeah I just think that it every which way you look at it is bad. It's bad for everyone uh I think that for in that scenario that Nami mentions that it's absolutely spot on. I've come across it many times someone who said well I'm a director now I certainly won't be going across there as an A D then they've you know they've lost sight of the fact that perhaps in in a in a given situation an A D role in in shop A could have frankly you know better prospects uh a better opportunity to progress even better pay all of those things than a director role even an MD role dare I say it in some other institutions and I think it possibly says more about the person than it does about anything else. But I I don't think it's doing them any favors if if people take a view on their career progression generally and let that be their sort of guiding star, I don't think they'd be as focused on job title. But Nami's right in my mind it's a pretty desperate retention tool but it is a retention tool that I I I see in some cases does have some traction. It really does. Without further ado, because our guest Nial Mills is known like myself to be a talker with plenty to say and uh I suspect that you know the uh if we're gonna produce a podcast here that comes anywhere near being being a tolerable to the millennial uh uh listener base we need to crack on uh we're gonna bring Nile Mills into the conversation and uh and we're gonna get a different perspective this is a guy who has built over uh way longer than a decade 14 years I think uh I think I'm right in saying built a one of the most respected infrastructure investment platforms in the world um uh uh really a a true global top 10 infrastructure investment platform so we're gonna go to Niall and we're gonna see what he thinks so now we welcome to the podcast and Nial Mills who's the global head of infrastructure for first sentier investors Nial thank you very much for joining us pleasure Dan to see you uh as we've been discussing here we're engaged in a conversation around the the types of strategies that are being used at the moment by leading infrastructure investors like yourselves out there in the market there's a there's a war for talent there's no getting away from it in the 20 years that I've been working in this job uh I've never seen anything like it attracting talent is tough rather than me bang on to the listener in half an hour intervals as I am prone we want to get someone who's been out there building a business now very successfully for many years like yourself to to talk to us about the uh the strategies you've you've employed and what's worked for you maybe what's not worked for you so maybe we can start with I mean the obvious bonus guarantees the financial aspect broadly take it away tell us where you want to start sure look Dan I mean I suppose first of all I agree with you it's it's it's a it's a war it's a battle it's difficult to find good talent it's difficult to attract more often than not uh good quality candidates are talking to two or three different um funds at the same time so there's all kinds of competing tensions to actually to get the right person across the line.

SPEAKER_04 28:54

I think I'll almost take a step back from from the financial aspect of it. And the first thing I I'd want to say is I always say to our key candidates um this is actually a bigger decision for you than it is for us. Because if you're going to have a successful career in the infrastructure world your CV cannot have three or four job hops the first five or six years. That is not going to look good. You want to be making a decision that ideally if everything goes well and you're happy and there's no reason you should be staying there for 10 years. So what I say to individuals is it you know think this through really carefully meet loads of people in the team go for lots of coffees go for lunch have conversations don't just go through go through the recruitment process go through your diligence and make sure the culture suits what you're looking for. And if it does that's a massive step forward so that's so that's where I always start I actually want this sounds um I I'm not trying in any way to be um be puritan about this I actually want good candidates to make the right decision for them not for us because if they do that then they've thought this through really carefully so that's that's step one and in doing that what what we will try and offer is um we offer Brett we offer variety we offer a very flat culture um we offer the opportunity to work with some really really high class individuals who are active you know we're growing quickly we've got um several active funds in the marketplace we're doing transactions in North America Europe uh Australia New Zealand so you know there's it's it's a it's a good place to be we're doing you know some large deals some smaller deals lots of platform plays so all of that should give um individuals the two most important things in a career that if you get wrong you can't reverse and the first one of those is variety and the second one of those is working with great people. Okay so before you get to money you have to have variety and you have to work with great people and we work really hard to give people that and I think that's why our turnover is so low. I think because we're we're really really convinced that's important. Getting to the money side of it like all of our competitors all people in the industry uh you know we need to pay attractive base salaries we need to pay attractive bonuses will we consider um buying out yes we will will we consider waiting for somebody to join until after a bonus cycle of course we will um do we try and explain you know or try and understand I suppose the um the timing of somebody leaving their current employer yes we do you know we try and work very flexibly around all of that we're not dogmatic we're not you know tapping the table saying you must resign within two weeks and an offer and be with us that's the world doesn't work like that anymore. And I think in the early years for the at the at the more junior end of it it's about showing candidates that they've got variety that they're working with amazing people that are going to get coached and mentored and coaching and feedback is incredibly important for junior staff these days just incredibly important. So we've we've we've as a team we've worked really hard on improving our coaching and our mentoring uh both coaching ourselves to be better at it and getting feedback and giving feedback but then of course you know we we'll pay an attractive base um we'll pay good bonuses our bonuses are linked to profitability so I like it if we make money with a good year we've got a good bonus pool to pay the team um so we focus on that you know nice to have things like pensions doesn't doesn't seem to be much of a hook these days um relocation expenses of course if if necessary I mean that's a genuine cost we don't want people being prevented from making a good career move because of that but after that I kind of like to keep it very transparent you know I like I like to I like um people joining us to understand what they're going to earn at a more senior level if they're going to be part of a carry scheme again I want that to be transparent we operate a points scheme it's not difficult to understand you know there's there are no funny little clawback clauses in there to to unnerve people um you know our employment contracts have got simpler over the years that's still likely to be a bit more simple but there's an element of legality you've got to have in there but you know so so I think you know to summarise the environment that an individual might join is incredibly important. The quality people that they work out is incredibly important. You know transparency in an attractive financial package I think is very important. And you know and then the feedback I suppose the fe the feedback point is sort of it's two sided isn't it I do not believe for a minute in time-based promotion. We can all choose to go and work for our local governments and civil service and get a spine point every year and after 23 years we've been promoted 23 times yeah and we'll have a dull life I believe in a meritocracy I believe in promotion on ability on delivering results and on teamwork and on culture as well and the feedback side of it is it's important that individuals get the right feedback, get it in a timely way, get direct and accurate feedback. It's important to deliver tough messages sometimes, right? Really important. Absolutely can't just pat people on the back all the time you've got to give them the tough messages because we all learn from that. And if they do that then they're responding well then hopefully that will lead to development career development and promotion. It doesn't come from time it comes from ability and performance.

SPEAKER_01 33:20

I think it it's very interesting that you focus I I jumped straight in there didn't I on the financial aspect and a lot of our podcasting has been around compensation so perhaps that's why but I'm glad that you pull me away from that and say because I I think there's a I think that there's potentially a situation in the market right now where it's for the non-financial aspects that you need to stand out because the the the market's so competitive that maybe financial terms from one platform to another kind of you know give or take blend into one and it's about how can you stand out and make yourself the um you know the business that a that a star candidate wants to come and join. Yeah and I think yeah you're right that you know the the the and and I think as well post-COVID I think it's a really topical point Nial is environment and what is that environment going to look like uh both in terms of the the obvious the physical and that that sort of sense of flexibility how's all that going to shake out coming out of COVID but as you say as well especially I think at the very junior end of people's career the coaching the feedback I want to be shaped into a successful infrastructure investor over time that's probably not going to happen sitting at home on Zoom five days a week it's a really interesting point Diane you know I I don't suppose any of us know what all this is going to look like in a couple of years' time and it will vary there'll be different models that come out of this but um I would hope that my team my colleagues want to be together for that feedback for that engagement for that learning for that atmosphere for that culture uh so I would hope that on a you know on a regular basis I don't know if that's one day a week two days a week whatever I don't know if it's random team check-in days but I really hope that that energy comes back and I you know I've said for many years um I'm I'm a right I'm a very very lucky individual you know I sometimes don't sleep very well on Sunday evenings right why is that because I'm excited to that's because you're excited to get to work on Monday it's excitement I want to come in and see everybody I want to see what's going on I want to be in there early I'm thinking about the week ahead if we can generate that kind of level of excitement in in the team for for check-in days or whatever it might be then then that's great.

SPEAKER_04 35:27

But I also recognize that you know remote working and the you know the pandemic has taught us that um we can be very efficient away from the office. There are days when I'm in my little um serviced office where I can do 12 VCs in a single day with no traveling, no taxis in between it can be really really efficient. And I I was chatting to one of our um relative juniors a couple of days ago and he said look he he he does a lot of modeling a lot of analysis a lot of diligence work reviewing reports and some days he just wants 10 or 12 hours to just work through that stuff at home and I get it. I totally get it. So we have to find that balance because maybe there is a productivity gain maybe there's an efficiency gain and maybe you know that that leads to better investing and better businesses. But but there is a need for personal engagement there's a need for coaching there's a need for just that occasional walk to grab a quick coffee for a chat um just that if you've got five minutes I want to talk something through with you.

SPEAKER_01 36:17

So we're not going to lose that but you know do we all know what it's going to look like perfectly no we don't yet it's it's a really really really interesting time isn't it well look my and by the way I I the reason I was too slow to the punch there to predict the answer that you are uh you're excited is because I've been on I've been muting myself because I'm having a uh some work done someone's building me a bar if anyone's interested in my house and uh so that if you can hear some dull drilling in the background I'm gonna try and get my sound person to to take that out but look back to the point the um here's what I think is going to happen. This is my the way I see it shaping up I think and it's it might be quite an obvious statement but I think it's gonna fall into two pretty distinct categories of people one people like myself frankly and I think you're a bit of an anomaly Nile which could be I think it could be a huge advantage to you in certain respects you are that person. I know from our conversations during COVID that you've been pulling your hair out. You've been growing your hair so you can pull it out more easily during COVID stuck in Primrose Hill wanting to be out there in in the office and and mixing with your team and and and making stuff happen. I think a lot of people in your type of position in other organizations and I'm guilty of this too are very happy working from home and they've got a nice office set up here and don't have to travel in so much and and all the rest of it. I think that there'll be a group of people who really want to get back to the office. Typically those people will be more junior guys at the start of their career that they're there to learn to soak up the experience of people like yourself but also they're there for the social aspect you know they want to be in central London you know quite a lot or wherever it may be to socialise. Who knows they may even meet a future life partner in the ranks at work or somewhere else in some other service provider, recruiter or some other business. And so they're not going to do that at home. So I think there's going to be that group of people and then there's going to be the group of people which typically will be more experienced people maybe they've reached a point in their life where they've got a family they're not looking to necessarily be out partying the whole time on you know they're not there for the for the for the social aspect quite so much who will really value the level of flexibility ability to work from home a lot of the time and may make career decisions based on that. So here's what I think the larger organizations will have to cater to both. I think the smaller businesses and OneSearch falls into this category need to to pick a position and we've picked ours a long time ago and that is agile working. And if you're a person that needs to be in the office a lot don't come and work for OneSearch frankly is now the I guess the the by default is our position. So look it's a long-winded way of saying I think that if you're able to it sounds like you personally will uh you know be providing an environment where you know if people do want to be quite office centric they can but what about the other group of people?

SPEAKER_04 39:12

Well I I I think I think you can cater for both but I on a personal level I have a responsibility to you know set the ambition for our team and our business and I will do whatever it takes to make that happen. And for me that means I need to be in working with people available traveling flexible you know I I want an environment that is good for all all different ways of working. But for me I think setting a level of ambition is not going to happen by working at home. You know when I when I've got you know when we've got people working on a real-time deadline on a transaction they are going to want to focus on getting models like it and reports written that will be extremely effective at home um but you know I need to be out there meeting clients we've got to be able to travel to meet vendors we've got to keep relationships going and we've always had a philosophy of you know if if there's an opportunity on the other side of the world that requires you know uh catching a plane at seven o'clock tonight we'll do it um that's changed so you know the the equivalent today is if if you know if if a client on the other side of the world wants to want to chat at 11 o'clock tonight then we'll make it happen. And I think there's something in that energy and there's something in that ambition that translates into an exciting place to work. You know and yeah I suppose in in simple terms we we know technology works. If there's one thing we have learned over the last 12 months the technology works perfectly well. So let's capitalize on it and get the best out of it. But um you are right there's there's a there's a need to accommodate both styles of working and probably several different ones in between as well maybe in 12 months time we'll have the answers to that maybe in 12 months time we'll still be learning.

SPEAKER_01 40:34

Absolutely it's uh yeah it's gonna be it's gonna be interesting watching this play out so staying on I mean before I I move into you know away from maybe attraction techniques and and I want to talk about the interplay between attracting people and retaining people as well but just what so I can explicitly ask you on the financial aspects of attraction how do you feel about I mean I I work with many different organizations who have different views on this but you know buying out people's leave behind value that they've helped create for someone else no value for first sentier at all that you perhaps might be it might be suggested to you that you know this is going to be um yeah this transition's only really going to happen if that person is made whole for what they leave behind. How do you feel about writing a check for for some for some money they made for someone else?

SPEAKER_04 41:26

It's not an easy one is it you know do I do I want a a junior hire to be out of pocket and you know struggling when they're trying to buy their first class and become mortgages? No I don't but that's not really what we're talking about. Do I want a senior person to crystallize large sums of capital gain for others? Frankly no it's too hard to do I mean I I think the hiring managers in my teams you know my my senior colleagues if if when that's suggested or discussed I will point out that because we're on a direct line of sight through to bonus approval coming out of profit we're paying for it and that focuses the mind it's not an overhead it's a direct line of sight through that profit number is affected by what you're paying for that. So I my preference would be to bring in you know mid-level people see them perform and promote them and grow them writing huge checks for senior I'm not so sure it's a tough one. There are always exceptions to the rule in in every walk of life but um you know you you've also got to think about how is that then perceived by the team they're joining? Do you want to have envy do you want to have jealousy? Do you want to have a sense of well it was easy for you because when you joined somebody wrote you a check for three quarters of a million quid I think the answer would be well you know that's confidential and uh no one will know that we've uh you know we've just written a half a million dollar check to buy this guy out it's always confidential but it's always very difficult to keep this and and actually do you know what sometimes confidentiality makes it even worse because people assume and their assumption is always many times bigger than it actually is so it's really hard.

SPEAKER_01 42:51

But no I'm not so sure I'm not so sure about that Dan I think that's it's it's a tough one I mean individual cases case by case but um not so is there even an argument Niall that you know if someone doesn't if someone's been accumulating you know wealth that's not yet vested presumably that means that things have been going well they're on a journey towards the vesting the fruition of that value creation if they're prepared to leave halfway through that then frankly you know do you ask yourself questions as to whether you should be hiring them 100% you absolutely do.

SPEAKER_04 43:22

I you know it goes back to my early points about the right culture I'm I'm hoping that when we attract people into the business they want to stay with us for 10 years or longer. I make a personal promise to uh people that are joining us that if they join I'm not going to be leaving them you know I'm here until the end. I want people to feel the same way. If somebody's leaving and they've got a substantial amount of you know deferred bonuses or carry it's there's there's there has to be an explanation. There's something interesting there. Absolutely right there there really is. Yeah and and and frankly if they are joining something that is just so much better you know if they're they're joining this for them but they really think this is just the dream job and the dream team they want to work with then I will incentivize them to earn

SPEAKER_01 44:00

money over time once they've delivered value absolutely by creating value for for uh for you on on your platform then absolutely they can they can share in in that value for sure for our for our investors yeah um you know and i i i I tell people a little anecdote but you know I was in a pitch um for one of our well I think it's our largest client today but one of our largest clients about a year and a half ago uh and it was a final pitch it'd been many many years of work to get to this position and I was in this pitch I was in a boardroom with um their full uh investment committee allocating money plus union representatives in the room um because they represent a you know a very big worker stand plus some of their advisors in the room there were over 20 people in the room and uh uh the pitch went well uh lots of very tough questions particularly from the union reps about how do we treat employees in our assets about do we provide uh childcare do we do this do we do that really really tough direct questions um as well as very tough um investment performance questions from their CIO so you know it was it was a full spectrum as I left the room um the CIO shook my hand somebody I'd known for over a decade shook my hand said well done now um we'll be in touch in the next couple of days and I kind of had a feeling that we'd done it right I kind of had that good feeling that I think I thought we're gonna get this mandated we've done we've done this so I walked out of the room feeling good I also walked out of the room Dan feeling the weight of responsibility at that moment in time I knew that I'd made promises and a commitment to people who are representing the pensions of you know staff that may retire on only five or six thousand pounds or ten dollars ten thousand dollars a year and it was up to us to deliver that promise so there was no elation I I felt the weight of that responsibility to walk away from to walk away from that promise and that commitment is a big deal and I think when you've got senior people I'm not talking about people that need to make one or two moves in their career early on and they they start off doing something then they want to actually do something different that's okay right they're all young at that stage but you know a senior person walking away from value they've created I don't know I think it's interesting isn't it and and also the other I mean what what springs into my mind when you say that is it's a reminder isn't it that where is this money coming from that you're going and investing you know and and what would the the you know the man or woman on the street say who's coming up to retirement if they knew that Niall Mills was writing a check for half a million dollars because you know Sarah Smith uh you know down at XYZ Capital uh you know needs to be bought out to come and join Nile's investment team.

SPEAKER_04 46:30

I think it's it's I think it's really interesting in the infrastructure world really interesting.

SPEAKER_01 46:34

Okay so look look talking about retention talking about you've hired fantastic people uh and and specifically now you have and uh I've witnessed it caused it uh over the over the years uh great track record um the you've you've hired these great people um you know the team's humming you're raising money you're deploying it well what do you I mean do you feel like you need to put anything in place to make those guys I mean is your attitude in the same way that you said when people join my team I want that to be because they feel this is the right team does that just carry on then forever or do you think no no we should have some safeguards in place to make it let's say to disincentivize people from leaving if their head gets turned by a great opportunity elsewhere?

SPEAKER_04 47:22

Starting answer is you hope that you've got a business and a team where people don't want to leave. It's the old you know it's much better than I do down but it's the old push and pull um you know you can push people out of an organization by behaving badly they can be pulled up by somebody else but if you start pushing they will go. So you know you hope that they feel a sense of belonging and responsibility and engagement and development that just makes them think I don't mean I'm not looking for other job. You know the other side of it is that there are certain things that you I guess they're just sort of hygiene factors that you need to have there is an element of deferral on short-term bonuses uh that's just required these days it's increasingly required by legislation it's increasingly required for good governance um our clients ask us you know so when we're investing money on behalf of you know pension fund ABC and they've got you know 15000 members retiring on 6,000 a year you know they're asking about that. They want to know that is their money safe because you made a promise for you know 10, 15 years or longer um how do we retain the team?

SPEAKER_01 48:18

So there's so I think deferrals are essential and that's handy though isn't it sorry to interrupt that's handy because the I I find that organizations may be it's nice to be able to blame it on the LPs uh but the truth you know the truth is and the regulator but I think the truth is uh it's it's genuinely I'm I'm not saying it's not a very valid technique but it is a technique isn't it to make people think twice about leaving sure it is it's of course it's a technique um but you know I I think when when we first started our business um in in Europe you know we'd had a track record in Australia before that but when we really kicked off Europe uh about 13 years ago 14 years ago team turnover and team stability was an enormous issue for our clients because we were all brand new right it's an enormous issue yeah and and there were days when we didn't quite understand it there were days when we thought really you know you know 14 years down the line I do get it and and and one of the one of the things I didn't get back then and this is a really important element of areas that we have been successful in recently is first of all our clients are expecting a personal promise they're expecting a personal commitment so they want to see that.

SPEAKER_04 49:22

So that's important because they they have to go to their own internal organizations and then say please invest in this fund because I've met so and so and so and so they're good I like the track records I like the way they work together they seem to be able to deliver investment outcomes that's good. The other side of it though increasingly and you know all all of all of all of our peers and competitors will get this increasingly we're all having to be more creative and work longer at origination. The days of you know vanilla utilities coming to the marketplace and being auctioned off they're diminished right they still exist but they're diminished and quite often they're going for very very low returns. But originating an interesting opportunity may take five or six years. We've we've got a couple of examples in the last couple of years where we've been talking to potential vendors, they weren't even real vendors initially for longer than five years before we manage to close a deal with these individuals. Now if your team's turning over particularly your your senior team if your team's turning over three years you can't originate something over five years can you? No the math the math is easy. So you know so I think for me I think it is really important to have retention. I think it is really important that you retain staff. I hope you do that through having an amazing environment and an exciting environment where careers are growing and developing. But there is a piece of you also have to let's face it we're financial investors um you know we're not living on the poverty line I think it's important that our clients see us put our money where our mods are and be prepared to say I'm okay with my deferral. I've had significant deferrals in my bonuses for a number of years. It doesn't bother me at all. I'm okay with that.

SPEAKER_01 50:45

Yeah good well look I think that that as as you as you rightly say deferrals are commonplace. I think there are very few institutions that uh you know where there's not some element of deferral. And yeah I think that most most people in it's funny most people would probably say well look it's funny how when you get to the point where you're running the team that you really you really see the uh the need for those deferrals and maybe you didn't see that earlier on in the career. But I don't think anyone could argue could they that perhaps on coming into an organization you're benefiting from work that's been done by others before you presumably not coming in and generating everything that you do every relationship every phone call um everything that you go on to benefit from in the form of your carry wasn't generated by you. And so it's I guess this whole exercise of retention is it's almost finding a fair a happy medium in terms of where the cutoffs are in terms of when when can you participate in financially in in some of those games when it comes to the the back end of that Nile if it you know in in the instance that someone has left the organization how do you feel about uh you know aspects of retention retention tools that that that are in place like clawback uh you know taking back from people potentially money that they've already been paid and also aspects you know more legal mechanisms in contracts like uh non-compete non-solicitation uh length of notice period just interested in your views around that i i think it it's a timely question Dan it's all of those areas are things that I'm thinking about at the moment um and having open discussions with my my colleagues about I think uh clawback isn't something that we practice at the moment but it's a topic that's raised frequently by our investors and I think the balance for us probably lies in the realm of you know we shouldn't be paying out um carry performance fees uh from an account until we are absolutely certain that account will never dip into negative territory because you know the old the old the the extreme example of you know you've got 10 assets in a fund you sell nine of them off and they've all got great returns the tenth one's an absolute dog so you've sort of you know and the tenth one sold ULPs actually they've lost money you know that that that's kind of unpalatable that's not good business.

SPEAKER_04 52:59

So you know we've got an eye on that all the time and making sure that we're not uh in any way opening ourselves up for that kind of criticism. You know non-compete um notice periods it's interesting. I I think we would in some examples we will see that some of the assets that we invest in particularly the the bigger businesses that have been run for a long time actually have more onerous non-compete um notice periods than we have in in the funds industry. And it is something I'm thinking about because you know we can actually learn from the assets we invest in and many of them have got very strict non-compete you know for 12 months in fact many many of the the top advisors many of the law firms have got non-compete for 12 months yeah it's it comes down to certainly from my perspective where I I see this quite quite a lot it just comes down to what's actually actionable.

SPEAKER_01 53:45

You know you can pretty much write anything in a non-compete but it's just it's getting that that finding that that ground where it could be enforced it's what's in it's what's legally enforceable I guess.

SPEAKER_04 53:56

Yeah I think that's right and and I think yeah you can drive a coaching horses through many things but um let's take a really extreme example if if somebody walks out of the door and they take proprietary information, you know, if they've been emailing themselves you know confidential information out for the book question.

SPEAKER_01 54:16

Yeah. Oh no I mean I think I think um I think that's a given in any in any environment that if there's some foul play you know around someone leaving but I think it's uh more it's more commonly a question just around do organizations set those long notice periods um those non-compete just as a as as such a deterrent that people think I just can't leave I've had a couple of these situations where people I actively want to leave they want they've found an organization they want to go to and they just can't it just the the terms of their departure make it impossible and I and in those scenarios maybe maybe it's because I'm selfish and I think oh Dan McCarthy's going to lose his fee here. This is terrible but I do ask myself is that actually good for the business that's retaining that person because do you want an unhappy person on your ranks?

SPEAKER_04 55:07

It's not no I I I agree with you it it's not it's it you know you there's there's an element of you shouldn't be so restrictive and so penal that you're actually locking people in where they don't want to be there. It should be a balance between you know they they need to know they're walking away from something and hopefully they're walking away from a great job. So they have to think about that extremely carefully but um you don't want people so locked in they can't possibly do this. You know we're not we're not in the world of you know pharmaceutical research where you know that one patent might be the entire thing that you know supports GSK for 10 years. You know and that's different. We're in the world where you you shouldn't be destroying careers now you know and actually you know of the the small number of levers we've had over the years I you know at the end of the day when somebody wants to go somewhere else I just want the best for them and their families right you know and I want to see them successful. And there have been times in the past where you know we've got a good person but it just isn't quite the right job and off they go and then they're just well they're they're a superstar right you know they just land in the fact that you've the fact that you've then been able to you've taken that view you've facilitated helping them find something that is suitable you've remained friends with them after they've left the business.

SPEAKER_01 56:10

Yes that that word travels and and funnily enough becomes a great attraction technique. It's it is you know I guess to bring this background and to tie this neatly up that you know overly harsh retention techniques can actually then work against you at the front end trying to attract people people know you know not that I would name names Jeffries uh you know organizations that might be really uh um you know onerous in terms of um clawback maybe struggle to hire people because of it yeah no I I think you know there's there's an element of being a good employer kind of also means you need to be a good former employer too doesn't it I think that's a a very good point at which to to close this down. It's going to be our longest podcast Nile the the millennials will have switched off because they've got a uh a a short attention span as we as we both know look that's um genuinely really really appreciate you uh joining the podcast and giving us some of those thoughts that are uh frankly uh far more valid and far more interesting than I could come up with pleasure Dan really appreciate it cheers so there we go guys we've had the the views of the One Such credit practice we've had the views of Niall Mills there's a lot going on there there's a lot to unpick it's a complex scenario and this is taking place uh in what is without any question the the busiest infrastructure investment uh recruitment marketplace I've ever known in 20 years in the space so I hope that's been of interest to the to the listener base a long podcast admittedly see you next time for more information on any of today's topics or to contact the one search team please email the one search podcast at podcast at one dash search dot com