Banks could bolster asset management functions
It's been a mixed bag of results for the asset management divisions of investment banks in the second quarter, but there are reasons for optimism around recruitment plans going forward.
Leading the charge with bullish results in asset management is Lazard, which posted a 58% increase in operating revenue for the first half - to a record $370.9m - and a 26% rise in assets under management over the same period last year.
Eight MDs were added to its asset management team in the first quarter, showing that the division has been spared from the bank's trimming scheme announced in February. Despite this, Kenneth Jacobs, chairman and chief executive of Lazard said hiring will be conducted at "thoughtful pace".
Elsewhere, investment banks' asset management arms have not been particularly positive. Goldman Sachs, for instance, saw a 5% decline in AUM and just a 3% rise in net revenues on the first quarter.
Nonetheless, when asked where the primary areas of expansion would be going forward, David Viniar, the firm's CFO, said: "This is not exclusive, but probably the places of biggest concentration are our investment management division and some of the support areas."
Similarly, J.P. Morgan has added nearly 700 to its asset management headcount (including wealth management) over the last quarter. "In terms of asset management, we are always adding product and we are adding bankers," said Jamie Dimon, CEO of the firm during the Q2 results conference call.
Even Morgan Stanley, which has shaken-up its fund management function and retreated from the retail space, pointed to "the build-out of the institutional and money market funds business".
Can we expect therefore a great deal of hiring within investment banks' asset management divisions for the remainder of the year?
Not necessarily - continuing pressure around asset outflows across the industry has led to renewed cautiousness around hiring within the industry, including within the banks, according to headhunters.
"The largest level of demand for sales and relationship management staff, with experience within cash and fixed income," says Chris Sevenoaks, consultant focusing on asset management at Healy Hunt Partners. "Much of this has been at the senior level - associate director and above."
There has been some movement recently, however. J.P. Morgan Asset Management unveiled Peter Aspbury as head of European credit research this month, and he's expected to build a team over time. Gary Clarke also joined as head of its London-based global equities team in May.
Goldman Sachs Asset Management, meanwhile, may have a need to replace some key recent departures. Jim Cielinski, formerly head of investment grade credit, has moved to Threadneedle as head of fixed income, while Maria Gordon, previously head of global emerging market equities, has reappeared at Pimco.
