At every visit with clients throughout the fall, executives ask me, where is the demand, and what are expectations? And each time I pose the rhetorical question, “Where are the flows?” We continue to see demand for senior executive talent in asset classes and firms that are experiencing robust new asset flows and where functional skills are driving profitability in those segments. However, overall expectations on compensation are moderating, both with senior professionals talking about their own expectations, as well as with C-Suite teams setting the tone through communications and moderating bonus pool accruals. We expect total compensation to end up flat to 2022. The exceptions to this are in areas of demand listed below. Our recruiting partnership pipeline continues to remain robust into Q4 2023.
Driving recruiting demand are:
1. Asset classes where flows are strongest including:
- Real assets, particularly infrastructure
- ESG/sustainable investing
- Alternative credit
- Private equity
- Most hedge fund strategies
- Non-US small-cap and emerging markets
- Narrowly focused thematic investing
2. Functional areas of expertise, including:
- Technological skills in every function, particularly focused on the utilization of sophisticated algorithms to make large non-financial data sets actionable, and the use of large language models like ChatGPT
- Marketing, particularly digital marketing, as sales organizations continue to consolidate within distribution groups
- Customized, volatility-managed multi-asset class solutions, instead of the “nine style boxes,” in both retail and institutional segments
- ETFs and other more specialized wrappers like interval funds, not open-end mutual funds
3. Certain types of asset owners:
- HNW focus of RIAs and family offices, not mass affluent served by independents or wirehouses.
- Foundations & endowments, not the corporate pensions
- The expansion of automated self-service online technology platforms for mass affluent investors with increasing customization, similar to what happened in the 401(k) product area over a decade ago..
The drumbeat of global geopolitical instability and wreckage in the fixed income market of has led many firms to adjust staffing at the margin, with frequent announcements of 1-2% rounds of layoffs. However, with the exception of the largest global banks suffering from revenue deficits in investment banking, most asset managers continued to pursue recruiting non-exempt staff to cover deficiencies created by pandemic turmoil. The C-Suite has largely been spared from these cutbacks, even at the largest ’40 Act firms where there has been almost no organic growth since 2016, and earnings are anemic.
Hybrid Work Continues to Evolve
Two bits of advice so that we don’t go down a rabbit hole on this important but overly discussed topic.
- For most professionals, fully remote work is a myth, and the sooner you get back into the office, the better it will be for your career.
- For C-Suite executives in professional services, no one is going to willingly commute 30-60 minutes to an office to talk on the phone or work on a spreadsheet ever again. It is up to leaders to continually upgrade their own skill sets, technology platforms, and real estate footprints to capitalize on a 3/2 hybrid work schedule, in order to be more effective with less co-located work time.
Perhaps the most interesting story is how quickly professionals went back to office work in smaller SMSAs and suburban settings where they commute to work in their own car 15-20 minutes and have free parking. However, professionals required to travel 60+ minutes on public transportation are remaining resistant to coming back to the office. Significant challenges remain and we are anxious to read more peer-reviewed scientific research to see what is working and where the productivity persists
Where Are We Busy?
An excellent example of how many of the above trends came together exists in our multiple search recruiting partnership with Greenbacker Capital. The firm is a $3 billion renewable energy private equity firm operating a roughly 4 gigawatt, 400-site portfolio of wind, solar, hydro, biomass, and EV mobile facilities. The firm has primarily been financed through an interval fund by a qualified investor HNW asset owner base accessed through a number of RIA channel relationships.
- President & CEO – $40 bil RIA
- President & CEO – $30 bil ESG Investment Firm
- President & COO – $5 bil RIA
- President & CEO – Leading Financial Services Association
- President & CEO – $4 bil Family Office
- Board Member – $3 bil ESG Private Equity Firm
- Board Member – $110 bil Global Asset Manager
- Board Member – $10 bil Mutual Fund Complex
- Division Executive & Head of $2 bil Investment Business – Mission-Driven Payment Services Fintech
- Managing Director & ETF Division Manager – $80 bil Asset Manager
- SVP & Head of ETFs – $1 trillion Global Asset Manager
- Partner & Head of Retail Distribution – $200 bil Private Equity Firm
- Head of Retail Marketing – $200 bil Private Equity Firm
- Head of Retail Sales – $200 bil Private Equity Firm
- Partner & CFO – $30 bil Hedge Fund
- Partner & CFO – $3 bil ESG Private Equity Firm
- Chief Investment Officer – $3 bil Endowment
- Partner & CHRO – $40 bil Global Asset Manager
- Partner & CHRO – Boutique Global Investment Bank
- Partner & COO, Trust Services Business – Large Regional New Hampshire Law Firm
- Managing Director & Head of Client Service & Operations – $40 bil RIA
- Partner & COO – $4 bil RIA
- EVP & Chief Marketing Officer Retail – $1 trillion Global Asset Manager
- SVP & Head of Digital Marketing – $1 trillion Global Asset Manager
- Head of US Retail Channel Marketing – $700 bil Global Asset Management Firm
- Partner & Chief Marketing Officer – $10 bil Global Institutional Asset Manager
- Portfolio Manager, Emerging Market Local Currency Credit – $50 bil Asset Manager
- Portfolio Manager, Global Small Cap Value Equities – $60 bil Asset Manager
- Head of Investments – $4 bil Family Office
- Head of Family Office Distribution Channel
- General Counsel – $1 bil Wealth Management Private Equity Fund
- Head of Risk Management – $30 bil Hedge Fund
- Head of Human Resources – $30 bil Hedge Fund
- Head of Channel Marketing – $80 bil ETF Specialty Firm
- Head of Talent & Deputy CHRO – $80 bil Asset Manager
- Product Manager, ETF & Blockchain Asset Classes – $80 bil Asset Manager
