Canadian Funds Engage in Talent War

The subprime mortgage disaster is less severe for Canadian financial institutions and hasn't had a major impact on their hiring plans.

Indeed, the University of Toronto's Rotman School of Management hasn't noticed any slowdown in recruiting activity on campus, according to Jeff Muzzerall, the school's director of business development.

"All of the companies that recruited last year continue to recruit, including the Ontario Teachers Pension Plan, The CPP (Canadian Pension Plan) Investment Board, Goldman Sachs and the Hospital of Ontario Pension Plan," Muzzerall told us.

Hedge funds also are hiring. "You are always on the lookout for people who can drive Alpha on a sustainable basis," says Phil Schmitt, chairman of the Canadian Alternative Investment Management Association and chief executive of Summerwood Group Inc., a hedge fund based in Toronto. "It's an industry that thrives on ideas that aren't in the mainstream," he observes. "We're trying to find return sources that aren't available to traditional portfolios."

Talent Heading North

In previous years, Canadian firms worried about the brain drain of talent to the U.S. That's less an issue now, given the favorable exchange rates of the Canadian dollar and the desire of some Canadians living in the U.S. to return home in hopes of finding a less stressful lifestyle lifestyle.

MBA graduates at Rotman are getting salaries averaging (Canadian) $83,000 with signing bonuses of between $15,000 and $25,000.

Increasing numbers of U.S. residents are seeking jobs in Canada. "Students from top U.S. business schools are hedging their bets by applying to Canadian investment banks, strategy consulting firms and packaged good companies," Muzzerall says. "Rotman graduates' main competition this year is as likely to come from Harvard, Wharton and Columbia as it from our great Canadian colleagues."

Muzzerall describes employers as seeking a minimum of three years experience with a top-flight firm. Having a CFA or CA designation also helps along with "excellent social skills and the ability to communicate what the numbers mean to clients and colleagues."

Competitive Recruiting

The hiring process now includes meet and greets with potential colleagues so they can get to know applicants in less formal settings, such as over dinner or even a hockey game. "The recruiters are coming early in the process and trying more innovative ways to target their top candidates by hosting educational events, career development workshops and social networking and entertainment events," says Muzzerall.

Both Schmitt and Muzzerall say competition for top talent remains intense. "Talent remains a scare resource," Schmitt explains, while Muzzerall describes the competition for top students at his campus as "vicious."

Part of the dynamic is the renewed competition hedge funds are facing from traditional investment players entering their business because of its high margins, Schmitt says. "They have now realized that to get into the game, you have to hire expertise."

Job migration remains common. For instance, Toronto-based Sprott Asset Management recently hired away Charles Oliver and James Horvatt from AGF Funds. Oliver, who has 21 years experience in the investment business and Horvat, who has more than nine years experience, joined Sprott as investment strategists.

Though Canadian firms do not have nearly the exposure to the U.S. subprime mortgage market as their U.S. counterparts, they aren't breathing easy. "They're concerned about their bonus structure this year should the slowdown in the United States carry forward north of the border," Muzzerall says. "It's not yet affecting headcount for recent graduates."