Recruitment in the hedge fund industry continues to become more competitive, with a number of factors impacting companies’ ability to attract talent. As market volatility continues, and issues such as DE&I come to the fore, hiring strategies must adapt to attract talent. Here we identify the challenges facing the hedge fund industry and its recruitment process.
THE HEDGE FUND INDUSTRY CONTINUES TO FACE WAR FOR TALENT
The hedge fund industry continues to face stiff competition, despite more than three times as many new recruits have entered the industry than left over summer. Forgoing historic movement trends, candidates are now exploring pastures new within the alternative asset space, as well as broader investment sectors, including FinTech. As banking institutions seek to raise base salaries and uncap bonuses in response to talent outflow in their sector, hedge funds are making acquaintances with a new competitor, whose ability to attract these professionals further threatens the hedge fund industry’s talent pipeline.
Moreover, larger players in the industry have seized the monopoly on available talent during the summer months. Managers with an AuM of $10 billion+ accounted for close to half of hedge fund hires in July, and smaller hedge funds and start-up managers are feeling the effects of this, losing out on potential talent during the recruitment process.
TECHNOLOGICAL SKILLS KEY TO POSITIONING
Technological expertise is a much sought-after area by discretionary and quantitative managers, with focus on alpha-generating opportunities bolstered by alternative datasets and algorithm processes. Hedge funds are now increasingly seeking tech talent that can drive this data analysis and use their knowledge to make judgements on portfolio positioning based on this. Quantitative expertise, particularly in specialist areas of illiquid markets, computer coding and AI, and digital assets, is ramping up competition for talent. From speaking with the market, Orla Louden, Senior Consultant, has noted apparent job dissatisfaction with mid- ranking quant talent, where the key concern is a perceived lack of agency and autonomy. To feel satisfied in these areas means having an understanding of context and being able to influence other people. Without these, feelings of powerlessness can spread.
FOCUS ON D&I COMES TO THE FOREFRONT
Discussions around DE&I and hiring have ramped up, particularly in the past 18 months, with companies seeking to redress those areas severely underrepresented in the industry. One such area where diversity is clearly lagging is senior management roles held by women, with data from Preqin revealing that less than one-quarter of these positions are held by women.
Consciously considering DE&I in the recruitment process is paramount to ensure diverse thinking in decision-making. In such a volatile market, homogenous thinking is a major risk factor when the need to explore new ways of working is critical. As your recruitment partner, Coopman can support you in exploring diverse talent pools to assist you in your DE&I hiring strategies.
CANDIDATES MOVE WITH CAUTION & PLETHORA OF OPPORTUNITY
As hedge funds look to ramp up their recruitment process to attract individuals with more diverse skillsets and experience, candidates continue to have the power in their hands. As discussed in our October update, Orla Louden highlights a slowdown in candidate movement in response to market volatility, and hedge funds will need to showcase their long-term commitments to candidates through concrete career paths, and ensure their offering is competition-proof, through assessing base salary offering and hybrid or fully-remote working structures.