The problems facing the asset management sector show no signs of going away. Performance struggles and fee pressures as passive investment strategies like ETFs and index-tracking mutual funds gain popularity have sparked a series of mergers, closures and job cuts.
The theory is that quants and data scientists will take over the buy-side as hedge funds and asset managers utilise huge third-party datasets to gain an edge over the competition. But recruiters and buy-side professionals speaking at a recent employment event hosted by the CFA Society New York, suggest that traditional skills are dying is an over-statement.
“Clearly hedge funds and prop trading firms [prioritize quantitative investment strategies and data analytics] – that’s how they operate now," said Matt Jabinsky, a senior recruiter at investment manager Lord Abbett.
“It seems like every school has a data science program, and it could be the early days of replacing some people who are pursuing MBAs,” he said. “The industry is evolving at a rapid pace, but the firm I sit at, Lord Abbett – we’re so fundamentally based, focused on very deep-dive investing, that I don’t think it’s going to be something we’re going to be big believers in anytime soon, but for the broader market, it’s here to stay.”
Chad Astmann, a partner and the head of asset management at recruitment firm Heidrick & Struggles, also believes that technology is more about supporting human decision-making.
“Firms are trying to keep pace by building out new types of businesses, and from a buy-side standpoint, there are those that have toe-dipped into digital, using it in a corner of their organization for certain things, such as marketing or operational efficiencies but not impacting the investment process,” Astmann said. “There’s a medium bucket of using data, firms that are starting to embed data scientists into the fabric of the investment process in some way, shape or form, but it’s still human beings driving the intellectual capital and alpha informed by data and digital to make you better.
Still, recruitment priorities among asset management firms in New York remains focused on data science, quants and the so-called 'quantimental" approach - blending a quant and fundamental approach to investing.
"Mainly hedge funds are using serious machine learning and deep learning scientists – some would say that’s scary and some would say exciting, depending on your perspective, but that is completely digitized and in that arena from a recruiting standpoint there is a tremendous pull from Silicon Valley and computer science programs,” said Astmann. “Watch those trends and position yourself as someone who is knowledgeable in these areas."
"You’re seeing a cross of your traditional IT type candidate and an individual that has an analytical background with a CFA merge – that’s what’s happening in a lot of these quant hedge funds and the sell side,” said Steve Gold, a partner at recruitment firm Green Key Resources.
These people are not necessarily coming from other financial services organisations. “[Financial services firms are hiring people from] tech firms and even the hospital industry – you’re watching these hospitals with big data sets, and you’re seeing those individuals get financial services jobs now. You’re watching a lot of candidate pools change," he said
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