Alternative investment managers hired a record number of marketing professionals last year, as private equity firms stepped up fundraising efforts, according to Context Jensen Partners.
In 2017, there were a total of 1,042 moves tracked by executive recruitment firm Context Jensen, rising 28 percent from 2016 and up 53 percent from 2015. Hedge funds made 299 hires for investor relations and fundraising, a 16 percent decline from the previous year. In contrast, private equity firms doubled down on marketing, making 274 hires – an increase of 27 percent from 2016.
“Private equity took the lead, and that was obviously mirrored by the amount of money that was raised last year in that sector,” Jensen, the recruitment firm's CEO, said in a phone interview.
Private equity firms have been building out their marketing teams as investors commit record amounts of capital to the asset class. Last year, a total of 921 funds raised a combined $453 billion, pushing un-invested capital above $1 trillion, according to Preqin data.
Despite the mounting dry powder, Jensen doesn’t expect fundraising – or fundraising staff hiring – to slow down in 2018. She pointed to an uptick in hiring activity by placement agents, who assist with fundraising, at the end of last year as one indication that there may be an increase in new funds in 2018. First-time fund managers often rely on placement agents, as do firms that are venturing into a new strategy, such as private credit, according to Jensen.
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“I keep hearing about new strategies, new niche opportunities,” she said. “There seems to be no letup in the private market space.”
Total hiring activity among alternative investment managers slowed in the final months of 2017, after a record-setting third quarter, data from Context Jensen show. Still, the 209 total moves recorded between October and December marked an increase from the fourth quarter of 2016, when there were 188 marketing hires.