Tumultuous Markets Present Challenging Landscape for Executive Retention and Recruiting
Demand for “C” Suite recruiting in the asset and wealth management business eased in the first half of 2022 from the exuberant levels of 2021, but Q3 2022 has seen a renewed demand from specialty firms with positive asset flows and products with higher margins.
Firms with strategies in private equity, real assets, hedge funds, and distinctive ETFs continue to see strong flows and steady margins, offsetting broader market declines. This presents difficult decisions for firms with traditional long-only equity and credit products that are experiencing weak flows, eroding margins, and falling market valuations. A large number of firms in this latter category, many of which have significantly reduced bonus pool accruals starting in Q2 2022, will have significant challenges with engagement and retention of senior professionals at the end of this year with the likelihood of lower compensation for year-end 2022. Conversations on moderating compensation and career advancement expectations need to start early and be frank, direct, and transparent. Teaming “at risk” executives on high visibility growth initiatives is one of the best tools for engagement in these difficult times.
Hybrid Work Is Here to Stay
As outlined in our Hybrid Work Leadership Blog Series, the cat is out of the bag, and professional services employees are unlikely to commute more than 30-minutes to talk on the phone or work on a spreadsheet in the future. However, the importance of co-located work is critical and underestimated by both executives and business leaders. Many executives believe they can continue to work remotely most of the time, and this expectation is unrealistic. More importantly, with less time in the office inevitable, business leaders need to refocus on building a new personal people management toolkit to make better use of the more limited co-located work time. Blaming the “great resignation,” rather than accepting personal responsibility for falling levels of engagement is just as unproductive as demanding a full-time return to the office program.
ESG Leadership Transitions to a New Phase and Recruiting Demand Surges
ESG leadership skills are transitioning away from philanthropic evangelism and, as a strategic business imperative, focusing on integrating material non-financial data into all investment decision-making. This requires a different type of executive who is more investment-oriented, has a wide variety of skills using AI and technology tools, and is able to create a set of real-time, actionable research tools integrating multiple sources of data. These tools must then be integrated into all investment decision-making, a process more about training and influencing existing portfolio managers across all products, rather than launching a new ESG investment strategy.
The skills necessary for the execution of this ESG integration mission are far more complex than sustainability mission messaging, which has dominated most recruitments in this field over the last decade. Career experience in investment research, portfolio management, risk, and investment operations are all critical. Regulators in both the US and Europe have noted this shift and are taking action (unfortunately with unintended consequences as the likely outcome).
The impact of successful ESG investment leadership goes beyond improving investment returns through the integration of a broader set of material information on companies and markets. Well-managed sustainable investment programs endow the firm with a culture of mission, and higher engagement scores amongst the staff and an improved recruiting brand are the result.
We remain active in this field, and there are only a few industry-wide best practices. The optimal solution for any firm is often guided by the historical context of the individual business, its earlier activities, and the skills and interests of its existing team. In addition to recruiting ESG investment leadership, we have worked with ESG investment firms such as Greenbacker Capital on corporate and Board leadership roles.
- President & CEO – $40 bil RIA
- President & CEO – $30 bil ESG Investment Firm
- President & COO – $5 bil RIA
- President & CEO – Leading Financial Services Association
- CEO – $4 bil Family Office
- Board Member – $2 bil Renewable Energy Yieldco
- 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
- Partner & Head of Retail Distribution – $200 bil Private Equity Firm
- Partner & CFO – $30 bil Hedge Fund
- Partner & CFO – $2 bil Renewable Energy Yieldco
- Chief Investment Officer – $3 bil Endowment
- Partner & CHRO – $40 bil US Asset Manager
- Partner & COO Trust Services Business – Large Regional New Hampshire Law Firm
- Managing Director & Head of Client Service & Operations – $40 bil RIA
- EVP & Chief Marketing Officer Retail – $1 trillion Global Asset Manager
- 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 Risk Management – $30 bil Hedge Fund
- Head of Human Resources – $30 bil Hedge Fund
- Head of Retail Marketing – $200 bil Private Equity Firm
- Head of Retail Sales – $200 bil Private Equity Firm
- Head of Digital Marketing – $1 trillion Global Asset Manager
- Head of Retail Channel Marketing – Large Global Asset Management Firm
- Head of Channel Marketing – Mid-Sized Specialty Asset Management Firm
- Head of Talent & Deputy CHRO – $80 bil Asset Manager
- ETF & Blockchain Asset Class Product Manager – $80 bil Asset Manager
