If you work in compliance or regulation in an investment bank, you probably have very good reason to fear the rise of technology. As so-called 'Reg-tech' has taken hold, compliance spending is banks' new target for cost cutting. It's fortunate, then, that compliance jobs are still very plentiful on the buy-side.
"The buy-side has exploded in terms of compliance hiring in the past few years," says Glen Roberts at recruitment firm Eames Consulting Group. "Compliance jobs are growing across private equity funds, private debt funds, property funds and hedge funds," says Roberts. "Teams have gone from nothing to three or four people as a lot of the bigger funds that had outsourced their compliance roles previously are now bringing them in-house."
Roberts isn't mentioning names but hedge funds like Millennium Management and Citadel now have over 80 and 170 compliance professionals each globally. Private equity fund KKR has over 120. Smaller funds have smaller compliance teams, but with many employing a handful of compliance professionals each the numbers add up.
The buy-side's enthusiasm for compliance hiring comes as banks are moving in the opposite direction. When HSBC disclosed its new strategy this week, it proclaimed its intention of saving $4.5bn by the end of 2022, of which 60% is to come from cuts to the middle and back office, where compliance staff sit. Similarly, when Barclays announced its results last week, CFO Tushar Morzaria said the bank had cut spending on mandatory regulatory controls by a third between 2018 and 2020.
As banks have squeezed compliance spending, often by moving roles offshore and automating where possible, Roberts says funds are providing a helpful safety net for compliance professionals who want to stay in major financial centres. Making the transition isn't always easy, he says: asset management compliance professionals need to work across the spectrum whereas compliance jobs in investment banks are often more specialised and niche.
For those who adapt, it can be worth it. "The buy-side pays at least 10% to 20% more than the sell-side in salary alone," says Roberts.
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