Investment Management Hiring Trends

by Susan B. Weiner, CFA

Notes on a presentation by Paige Steinbock of Korn/Ferry International to the Boston Security Analysts Society, December 11, 2003

PREDICTION

  • There will be a big uptick in hiring by the end of the 1Q2004, after bonuses are paid

TRENDS

  • More companies are doing their own recruiting, so check their websites if you’re job hunting
  • Opportunistic hiring, include team lift-outs, to strengthen or upgrade product line
  • Institutionalization of hedge funds, which are also diversifying their product lines
  • Boutique firms (< $10 billion in assets under management) that have good performance are strengthening their research and often hiring their first employee specializing in client service
  • Korn/Ferry is seeing more searches for fundamental analysts than quantitative analysts
  • Korn/Ferry’s search revenues have increased dramatically over the last three months, though it’s too early to say it’s a trend

COMPLIANCE EMPLOYEES

  • Big increase in compliance hiring, which is currently Korn/Ferry’s busiest investment management practice
  • More compliance heads are reporting to CEO instead of chief operating officer
  • Firms are starting to take their compliance heads to meet clients

BONUSES

  • Shift from bonuses based on subjective criteria to discretionary compensation based on achievable objectives
  • While investment companies have done well the past couple quarters, nothing has stabilized, so bonuses may disappoint

BOSTON TRENDS

  • Boston firms are tending to insist on candidates who exactly fit their requirements
  • Korn/Ferry’s Boston office has recently seen a dramatic rise in the level of incoming phone calls

TIPS FOR NEWCOMERS TO INVESTMENT MANAGEMENT

  • Job as an analyst with an investment consulting firm may be a good starting point, giving a broad exposure to different kinds of investment management firms
  • A good path into securities analysis includes: good undergraduate school, industry experience and MBA from a top school; however, people without this background can get jobs through determined networking
  • CFA is increasingly required for sales and marketing jobs in addition to jobs in portfolio management and investment research
  • CFP is useful credential for dealing with high net worth clients