How to spot a fund manager - go to his leaving party

Another new face on your fund management team? With research suggesting one in every two UK fund managers changed jobs last year, it's hardly surprising.

Chris Manfield, head of the European asset management practice at Whitney Group, says fund managers are warming up to the recruitment game. "While we have been in a bull market for two to three years now, it took asset managers a year or so to feel confident in the marketplace before they started hiring," he tells us.

This may go some way to explaining the huge levels of staff turnover in the industry. Research released last week by fund administrator the Alexander Forbes Group suggested that turnover at UK equity and fixed income managers is now more than 50 per cent per annum.

Losing half the team each year can't be good for business. Financial News last week highlighted turnover as a possible source of poor performance at Credit Suisse Asset Management. Credit Suisse vice chairman Bob Parker, described the market for staff as the 'hottest I have seen it."

There are signs that funds are looking for ways to keep wayward staff in check. Rebecca Austin, head of asset management of Veni Group, says long term incentive plans, which tie employees in with restricted stock, are becoming increasingly popular. So are multi-year compensation plans.

"Most firms tend to have a three-year vesting period. I have come across one that was for 10 years but that was very unusual," she says.