The asset management industry got battered last year as extreme market volatility led to generally poor performances and job cuts at several big-name firms. BlackRock, State Street and quant fund AQR Capital Management all announced redundancy plans in January. Of course, that doesn’t mean there isn’t any hiring happening on the buy-side. In fact, the two roles that firms are currently looking to fill are in high-demand directly due to a rocky 2018 and fear over a potential recession.
With credit defaults more likely in 2019 than in past years, asset managers are actively looking to add more restructuring experts, particularly in the middle market, according to a new report from Wall Street headhunter Whitney Partners. “We expect significant buy side hiring for candidates with restructuring advisory backgrounds, as funds that own credits will be forced into asset recovery mode, while also looking to profit off of distressed conditions,” they wrote.
Hedge funds, private equity firms and other asset managers are also looking to upgrade their talent for one critical function: fundraising. Nearly four out of every 10 hedge funds declined at least 5% last year, while traditional asset managers are struggling to compete with low-fee alternatives. The end result has been a sea of redemptions – roughly $17 billion from equity hedge funds in the fourth quarter of 2018 alone – along with added difficulty in recruiting new money. Blackstone Alternative Asset Management, the world’s biggest hedge fund allocator, said it plans to back fewer managers this year due to market conditions. New launches are also way down, as is the seed money new funds are starting with.
The current fundraising environment has asset managers eyeing folks with more than just a rolodex. They want salespeople and marketers with in-depth product knowledge who can differentiate themselves from the rest of the pack that are knocking on the same doors. “This is ultra-important to sector funds across hedge and private equity, making hiring more competitive for applicants, while narrowing the candidate pool for employers.” The report suggests that having a background in investment management rather than traditional fundraising may be more important. Geography will also be key.
While North America has been the epicenter of fundraising in recent years, buy-side firms are now looking to diversify their client base. This means more hiring of fundraisers and marketers in countries like the U.K., Italy, Switzerland and Germany, according to the report. Asset managers will always be eyeing proven investing talent, but filling seats in restructuring and fundraising appears to be their most immediate need.