Buy-side recruitment is "back to early 2008 levels"
Far from taking a cautious approach to recruitment, it seems that asset managers may been enthusiastically adding headcount during the second quarter, with vacancies matching those last seen in the halcyon days of early 2008.
A Q2 recruitment update by Robert Walters suggests that buy-side recruitment is on the up and firms are shifting away from a middle office focus towards hiring front-line staff.
"We witnessed a renewed focus to recruit front-office investment and sales staff and in the middle office. By contrast, the majority of recruitment in 2009 focused on risk management and compliance professionals," says Sally Martin associate director at Robert Walters.
While such bullish assertions should, of course, be taken with a pinch of salt, there are reasons to be optimistic around asset management recruitment currently.
Hiring in the first half of this year within asset management increased by 20% on the same period last year, according to pre-employment screening company Powerchex (admittedly up from very depressed levels). There's also no shortage of people moves in front office positions.
"Looking at our own business, there has been a significant pick up in senior front office searches since the beginning of the year, particularly within fixed income and specialist areas such as liability-driven investment," says Martin Lorigan, head of asset management at Principal Search. "However, there is still not the same volume of activity at the senior level as there is at the junior to mid levels across middle and back office."
It's doubtful whether many fund managers will be willing to shell out and commit to bolstering front office headcount dramatically until there's more certainty around improving revenues and client inflows.
Schroders, for example, posted some positive first half results, but has yet to really rebuild its team since making redundancies last year. Headcount now stands at 2,662, which is a nominal increase from the 2,626 employees at the same point last year.
In order to reduce the costs associated with bolstering front office staff, some fund managers have been offering a greater percentage of total compensation in company stock, which vests over a number of years.
But the asset management arms of banks, meanwhile, have been bolstering base salaries in line with the policy throughout other areas of the firm. This is creating an obstacle.
"We are also increasingly conscious of the gap between basic salaries at the top tier investment banks, and their fund management subsidiaries, which have increased significantly and those at the pure play fund managers. adds Lorigan. This inconsistency will make it hard for some of the fund managers top attract talent from the banks - particularly in the more esoteric markets such as structured products."
