Asset management, as many senior investment bankers have been at pains to point out, has a bright future. Those in the know on the sell-side need to make the move to the buy-side, and sharpish, before everyone else gets the same idea. But aside from vague proclamations about rising revenues and enhanced job opportunities, where exactly are these positions? We’ve spoken to recruiters specialising in asset management, private equity and hedge funds to give you an idea of what’s available right now.
You might be a sell-side research analyst looking for a switch to the buy-side where the work is more interesting, the pay better and the job prospects decidedly sturdier. However, hedge funds, particularly those following a long/short equity strategy, want more than the normal sort of research analyst, says Anthony Keizner, managing director of executive search firm Glocap. These analysts perform the sort of due diligence on a potential investment that will give the hedge funds an edge over their rivals, he says.
“Their methods are more akin to investigative journalists, and complement the role of the more quant-minded investment analyst. Their work is to help find a legal edge in a name,” he says. “These research analysts come from a variety of backgrounds including journalism, executive recruiters and the government.”
Royal Mail and Tesco's pension funds, the Canada Pension Plan Board and large U.S. pension funds alike are all looking to bolster their in-house investment expertise, rather than relying solely on external fund managers. The result has been a proliferation of roles over the past few months, says Chris Sevenoaks, associate director at recruiters Baker Noble.
“We’re seeing demand for quants, equity specialists and those with knowledge of hedge fund investments,” he says.
As investors demand products that can invest in a range of asset classes, the need for fund managers to offer multi-asset solutions has sky-rocketed in recent years. From a talent perspective, the industry has failed to keep up pace – a report earlier this month from State Street and research group FT Remark, which polled over 300 asset managers across the US, Asia and Europe, found that 64% cited a “capability gap” when it came to recruiting for these roles.
“There’s a huge demand for these people, particularly at the senior end of the market where deep experience is scarce,” says one senior asset management headhunter who is not authorised to speak to the media.
The operational costs of running a small hedge fund are spiralling and, increasingly, even boutique firms want to present themselves as a viable option for institutional investors. The result, says Keizner, is the rise of a key position where a single person takes responsibility for all the non-investment activity.
“Using titles such as 'president' or 'chief administrative officer' these people take responsibility for areas such as operations, technology, HR, finance, legal and sometimes marketing,” he says. “It's a reflection of the desire to become 'institutional quality' even earlier now that funds are increasingly hiring these experienced, competent people to oversee these important functions.”
Private equity firms are keen to bolster their junior ranks and the eager legions of senior analysts and first year associates at investment banks vying to make the switch across have been well-documented. Aside from the elusive ‘buy-side mentality’ and the ability to convince a potential employer that they could happily sit with you for a few beers, private equity firms are also seeking European language skills, according to private equity recruiters.
In particular demand, says one recruiter who declined to be named, are German, Swedish and other Nordic languages.
On the one hand, recruiters are celebrating a general pick-up in demand within the front office of asset managers, but the ongoing demand for compliance staff and risk managers means that the buy-side continues to bulk up its middle office. In particular, on the compliance side, there’s a shortage of people with the relevant know-how to carry out the Client Assets Regulation (CASS) for fund managers.
“Institutional asset managers still have a big need to bolster their compliance and risk functions,” says James Dewhurst, director of Investment Management Partners.