FIG teams want hedge fund talent
Recruiters say changing regulation, industry consolidation and a prospective rash of IPOs are driving demand for corporate financiers who are au fait with the hedge funds sector.
"A lot of banks have started looking at covering asset management within their financial institutions group (FIG) teams," says Isabel Martin, head of European financial services recruitment at search firm Korn/Ferry International. "Hedge funds are an important part of that effort."
The head of another international financial services search firm says Morgan Stanley, UBS, Credit Suisse, and Merrill Lynch are all looking to add hedge fund specialists to FIG teams. "Pretty much every bank is looking for hedge fund people. There's a growing awareness that hedge funds looking to consolidate and value their businesses will need help from advisory bankers."
Having begun the best part of a year ago, Martin says the trend is not exactly new. But one recent factor is liable to give it extra impetus - the Financial Services Authority's change to the rules dictating which companies can list on the London Stock Exchange. Last week the FSA relaxed previously prescriptive rules governing 'investment entities' in favour of a standards based approach, which it said would make it easier for multi-strategy hedge funds to list.
Martin says the potential of the hedge fund market is encouraging bigger banks to seek an advisory presence in the sector. Until now, she says the hedge fund industry has been too small and the resulting deals too low in value, to lure larger banks into participating. As a result, smaller firms such as Hawkpoint and Lexicon Partners, as well as banks like Bear Stearns and Lehman Brothers, are most established as advisors in the space space.
As the market develops, the bigger US banks are understood to be keen to leverage off their existing relationships in the sector, most of which are pegged on prime brokerage businesses and hedge fund sales teams. "It's all about the 'one bank' model," says the search consultant. "Hedge fund relationships are currently focused on dealing desks, and salespeople need to help clients develop relationships with the bank's corporate finance advisors too."
In some cases, he says this has made it possible for hedge fund-focused sales staff to transfer into FIG teams. But despite a shortage of hedge fund knowledge, he says this is rare. More commonly, he says the new hedge fund sector specialists are generalist FIG bankers who've spotted a good thing.
