As investors demand more transparency and better terms, asset managers are pouring money into internal fundraising staff to better raise – and keep – capital.
Last year, alternative investment firms hired 20 percent more marketing staff compared to 2015, according to new data from Context Jensen Partners, an alternatives-focused recruitment firm specializing in capital raising executives. Real estate managers showed the sharpest increase in hires, with marketing talent soaring 239 percent, while private equity firms increased such hires by 71 percent.
“A number of firms have heretofore used third-party private fund groups to raise capital,” says CEO Sasha Jensen. “While that model will always be in place, it’s going more out of fashion and individual funds are hiring asset raisers in-house who have deep relationships with investors.”
This shift has been driven in part by investors, who are requesting more information and more frequent communication from fund managers. According to Jensen, managers need internal marketing talent who can both fundraise and maintain on-going communication with investors about a fund’s performance.
“We’re seeing demand for an articulate, technical marketing professional who can tackle these conversations with investors from an investment analyst perspective rather than a marketing perspective,” she says.
The trend is most notable among real estate and private equity firms as they’ve seen an influx of capital in the last few years, according to Jensen. While hedge funds, the largest group tracked by the recruitment firm, accounted for nearly half of the total hires last year, the number was down from 2015. “Because of the fee issue and all the other uncertainty, there has been a pause on hiring in that sector,” Jensen says.
In total, the recruiter tracked 819 new hires in the U.S. and the U.K., up from 681 in 2015. The bulk – 613 – occurred in the U.S., as American firms increased hiring by 63 percent. Still, British firms experienced slightly higher year-over-year growth of 70 percent, driven by a record high of 92 appointments in the first quarter of 2016.