Whisper it, but hedge funds are hiring again. There’s no feeding frenzy of investment banks’ traders, but after a poor 2014 a lot of hedge funds are venturing out into the job market again.
The situation is far better in the US than in the streets of Mayfair in London, with hedge funds state-side reportedly speeding up hiring processes to make sure they don’t miss out on talent. But it’s picked up everywhere. “We’ve had a very busy 2015 so far, and the market is generally feeling pretty buoyant,” says Barry Seath, managing director of London-based hedge fund headhunters Mirage Recruitment.
And yet, most hedge funds remain selective about who they take on. Here are the jobs they’re struggling to fill.
Pension funds are starting to pour money into hedge funds, with KPMG expecting institutional investors to account for 25% of all fund inflows into the sector by 2020. But convincing them to invest in your hedge fund remains a hard sell – hence the renewed push to hire hedge fund marketers, according to Anthony Keizner, managing director of headhunters Glocap.
“The new hedge fund story (of consistent positive earnings, with low volatility and non-correlation to the markets) is playing well with institutional investors who continue to pour assets into the industry,” he says.
It’s become hackneyed to point to the upswing in compliance jobs in any part of the financial sector, but the push for middle office staff in the hedge fund “far outstrips” vacancies for any other part of the business, according to Seath.
Why? Well, aside from the supply and demand issue, compliance pros in hedge funds are generally reluctant to budge. “You have two issues – a lack of dynamism in the candidate pool, which means people are risk averse about moving and also any compliance moves raise red flags with investors so hedge funds look after their existing staff very well,” says another headhunter who declined to be named.
While the CEOs of large quantitative hedge funds herald the demise of the human trader, computer-driven hedge funds are making an effort to step up the recruitment of juniors. Whether someone in their late-20s with a mathematical or physics PhD can really be described as juniors, there’s a battle for new quant talent who can write the next generation of algorithms, according to hedge fund headhunters.
The route from investment banking towards hedge funds may now be more arduous, but like private equity firms, hedge funds are still willing to recruit for those at the junior level. While a move from the sell-side is still possible, you’re most likely to be hired as a junior analyst with at least a little relevant hedge fund experience, says Keizner.
“Firms like to hire people who ‘can hit the ground running’ and this therefore means taking talent from other firms where they’ve been playing similar roles,” he says.
Again, there’s a push to hire data scientists largely in the quant space. Winton Capital Management, for example, is the in the market to hire data scientists across its London, Oxford and Zurich offices to “develop novel statistical modelling and data mining techniques to identify information to use as the basis for trading systems”. Recruiters suggest that hedge funds are being realistic about the availability of data scientists in an overheating job market and are not requesting relevant industry experience.