The 2020 recession is accelerating systemic changes in the investment industry leading to a dramatic reset in profitability and compensation. Expectations should be managed early. Read our blog here.

Boards and firm leaders need to move quickly mid-year to begin setting expectations appropriately. Abrupt shifts to compensation and career growth opportunities on an annual basis often lead to unpredictable behavior, even amongst senior executives.

Despite these difficult messages, our continuing search work shows promising initiatives that have endured pandemics, recession, and market turbulence; secular trends in the investment industry where clients are still willing to pay a premium for good advice and persistent alpha generation.

Interestingly, many of these “opportunity zones” in our business are in niche strategies, either related to asset class or distribution strategy.

In distribution, they include strong digital leadership in marketing, ETFs as a wrapper to complement other sales channels, or using more complex asset allocation and portfolio construction algorithms, to create solutions unique to every client.

On the asset class front, these opportunities are frequently occurring in less liquid and more opaque markets, representing greater challenges of increased volatility for managers and asset owners alike. Many of these asset classes need to be accessed through limited liquidity vehicles, leading to the continued advantage for alternatives investors.

These niche solutions or asset classes are hard to scale. As a result, for the first time in over a decade, the very largest asset gathering firms are at a disadvantage in areas of profitable AUM growth.

Our recruiting partnerships reflect this shift, as our clients are increasingly smaller and more nimble firms defined by unique cultures and specific market-related skills. Their growth prospects are strong.

Diversity
Half of our successful candidates represent diverse cohorts since the founding of our firm, and this is a result of our relentless work to integrate a broader pool of highly qualified candidates in every search, as well as our endeavors to assist hiring managers to avoid the pitfalls of subconscious biases. These efforts are being recognized and put to work more aggressively by our clients. It is no longer sufficient simply to present a diverse slate… results matter!

The critical ingredient to our success in diversity recruiting has been our 15+ year efforts to move outside our comfort zone in building productive networks in the industry with diverse cohorts that were not considered mainstream by “C suite” managers.

Conclusion
We want to wish everyone well as we all endure the trials of the pandemic and recession. With 100s of millions sheltered in place around the world, our work in financial services, encouraging investment in business and supporting retirement savings, keeps us busy with a very worthy cause, and we should feel very fortunate.

We look forward to staying in touch and being helpful with recruiting or market intelligence matters. Please call or e-mail George or Beverly with any questions

Recent notable searches:

▪ President of The Investment Fund of Foundations (TIFF)
▪ CEO of a $4 billion family office
▪ Independent Directors for a large mutual fund, all diversity hires
▪ Independent director for large, public asset management firm, diversity hire
▪ CHRO of a large, diversified asset & wealth management firm
▪ CMO – Retail with a quantitative and computer science background for one of the largest mutual fund managers
▪ CMO – Institutional for mid-size global equity boutique
▪ Managing Director and Head of Client Service for a large ultra-high net worth trust and investment firm
▪ Investment team lift-outs for concentrated global small-cap equities and frontier market equities
▪ Managing Director and Client Coverage Partner for emerging market local currency debt team
▪ Head of ETFs to provide leadership for a large traditional mutual fund manager
▪ CEOs for several industry associations (MMI, IRI, NICSA)

Industry Thought Leadership:

▪ Dawn of a New Era: Compensation Expectations to Be Dramatically Reset (Blog)

▪ Leadership Transitions — Accelerating the Pace of Change (Blog), including
– CFA Institute CEO Seminar for Global Investors: Accelerating Change, A New Generation of Leadership Steps Forward (Panel)
– US Institute CEO Roundtable: The New CEOs — Cultivating the Next Generation of Leaders (Panel)
– Institutional Investor: Who Deserves to Be a CEO?
– Institutional Investor: Why Firms Want Fresh Blood

▪ Seismic Shift in Leadership Skills Underway (Blog), including
– CFA Institute Investment Professional of the Future (Contributor)
– FundFire Recruiter Roundtable: The Evolution of the Institutional Asset Management Job Market (Webinar)

▪ Asset Managers Return to Marketing Basics in Pursuit of Innovation (Blog)

▪ Unconscious Bias in New Hire Compensation — Profitability Expectations vs. Gender Pay Bias (Blog), including
– Pensions & Investments (Op-Ed)
– Fund Industry Intelligence, FI Breakfast Briefing: Cultivating Diversity in Asset Management (Webinar)
– FundFire Exchange: Addressing the Gender Pay Gap When Recruiting (Webinar)

▪ Independent Director Recruiting: Best Practice Review (Blog), including
–  Fund Board Views: “Q&A: Women On Mutual Fund Boards” (Panel)
–  Mutual Fund Directors Forum Fund Governance & Regulatory Insights Conference: “Fund Board of the Future” (Panel)
–  BoardIQ: What Diversity on Mutual Fund Boards Means (Webinar)

Networking to stay connected: