Inflation, the threat of a recession, and a war in Ukraine aren’t putting a dent in asset managers’ hiring practices. That’s surprising even to some recruiters.
Christopher Smailes, managing director, asset management at executive recruiter Sheffield Haworth, said he expected a slowdown given the challenges facing the economy and the markets. But he’s not seeing any signals that asset managers are curtailing hiring. He attributes the strong asset management job market to all the open positions that have gone unfilled over the last two years.
“There is still such a bottleneck of hiring that companies want to do, and there is a lack of talent across most functions,” said Smailes. “The pace of hiring has to slow down, but I’ve been saying that for almost two years.” The executive recruiter typically focuses on roles ranging from vice president to senior managing director. Smailes said hiring has been consistently strong on the investment side, as well as in distribution and marketing.
Alternative investment firms are the most active sector in the industry, despite fundraising challenges. Even though venture capital has been hit hard by the slowdown in initial public offerings, firms are still looking to fill senior positions in areas such as blockchain and cryptocurrencies. “It’s even busier than the traditional space. That’s a reflection of LPs continuing to rebalance their allocations more into private markets,” said Smailes.
And it’s not just institutions moving into alternatives; it’s retail investors, even the wealthiest, who have very little in private equity and other asset classes. Salivating over this relatively untapped channel, alternatives firms are racing to develop products, particularly in private credit, for high-net-worth clients with minimums as low as $50,000. “Five years ago, we didn’t do much hiring for family offices, RIAs [registered investment advisors], or wirehouses,” Smailes said. The last 18 months, however, have been particularly busy at the firm. But competition for private wealth sales teams, which include professionals with fundraising and product expertise, has also increased.
Reaching wealthy individuals through financial advisors and family offices located around the country is a labor-intensive business — not a bad thing for a recruiter. “You need head count that is triple or quadruple the institutional side,” Smailes said. Sheffield Haworth sees a lot of opportunity in private wealth in the years ahead. “Retail and wealth distribution groups are going to be a lot more active from a hiring perspective than the institutional side of the business.”
Of course, not everyone is quite as optimistic about hiring. Johnson Associates expects job cuts at both traditional and alternative asset management firms by the end of the year. In fact, the firm said that some managers have already begun to quietly reduce head count. Johnson Associates believes the cuts are primarily the result of a cooling labor market. In 2021, asset managers hired as quickly as they could and handed out competitive base salaries and generous bonuses.
Sheffield Haworth also sees a number of other hiring trends emerging, including managers building out teams of asset class specialists, in part to help market lesser known strategies and to help diversify their revenue sources.
Demand is also high for analysts and portfolio managers in emerging markets equity. The firm has seen increased hiring across the globe, including in Latin America and Asia. Among firms based in the U.S., demand is high for stock analysts with expertise in China and the rest of Asia.