Property derivatives: time to pile in?

Will property derivatives be the next hot hiring area in the derivatives market? Recruiters think so, but one fund manager at least has his doubts.

"The property derivatives market is still very much in its infancy and there's not much recruitment there yet," says Alex Tracey, a consultant at search firm Clifden Partners. "But it's certainly something banks are looking at - I expect a step up in hiring at the end of this year."

Russell Clarke, a director at search firm Mantis Partners, says there's increasing demand for property derivatives specialists from banks, investment managers and hedge funds. "Several funds and hedge funds are setting up in property derivatives," he says.

Nick Mansley, head of property strategy at Morley Fund Management, recently told Reuters that this is the first year Morley has dealt in property derivatives. But Mansley warns against exaggerating the sector's potential to create extra hires.

"There won't be huge additional headcount needs," he tells eFinancialCareers. "Most banks have already done their recruitment in this area, or are using existing resources to cover it."

In the event that banks or funds do go in search of property derivatives expertise, Mansley says it shouldn't be too difficult to find. "All you need is a mainstream financial markets skill set, which can be adapted," he says. "It may, however, encourage some more financially literate individuals to join the property fund management sector."