Buy-side blues

Recruitment in Australian asset management has proved more resilient than in banking, but stagnation is setting in and a fall in jobs may follow.

Jenny Greiss, an executive at Anton Murray Consulting, says the funds industry is managing the downturn well compared to the sell-side. "Funds don't hire so aggressively during the upturns, so they don't need to make so many people redundant when the market turns down," she adds.

Luke Heath, chief executive of Chandler Heath Executive Recruitment, says sector-wide headcount is at a standstill. He comments: "Market losses have reduced assets under management and the fees that the industry earns. As a consequence, industry executives are minimising costs. There have been some redundancies, but the theme is more one of headcount freeze."

Recruiters say hiring within super funds is proving comparatively strong, partly because they have a guaranteed pool of compulsory superannuation money coming in. "Custodians are also steadily recruiting - transactions still have to be administered. Larger funds are recruiting because they have a more stable investment base, but this is not a good time for boutique firms," adds Greiss.

Hedge funds are suffering more than their conventional counterparts. Greiss says stock market falls and the ban on short-selling are adversely affecting recruitment in this industry. Heath adds: "Even outstanding hedge fund performers have been vulnerable to fund of funds lowering their investments because of widespread redemptions."

Overall, an uncertain future awaits employment in funds management. Greiss explains: "A prolonged and significant downturn in the equity markets may result in erosion of funds' performance fees and a consequent contraction of the industry, particularly in regards to equity-focused funds."

So is it becoming more difficult for bankers to move to the buy-side because funds are demanding existing experience within asset management? "Yes," says Heath. "In labour market contractions, employers seek direct experience."

The market is now employer-led, says Greiss. "Most roles require very specific skill sets and at least two years of product knowledge. A funds-management background is preferred in the current environment, although experienced equity researchers or quants will still be considered," she adds.