Jensen Partners Q1 2021 Newsletter: Big rebound in hiring as demand for market talent reaches a record high
If the defining word of 2020 for the alternative investment industry was "trepidation," then a fitting description for 2021 could be "anticipation."
Whether it's anticipation at returning to some post-vaccination sense of normalcy, anticipation at returning to the office and reconnecting with colleagues, or anticipation at raising new funds and putting capital to work, many alternative investment firms are eager to get back to the business of generating returns for clients.
The driving force behind this go-go spirit is the largest cohort of new marketing professionals we've ever recorded, with a mind-boggling 745 individuals starting at new roles in the first quarter of 2021. For perspective, consider that the busiest pre-COVID quarter was Q1 2020 with 507 moves.
Much of the surge in the demand for marketing talent can likely be attributed to two key reasons: (1) alternative investment firms delaying hiring decisions until the vaccination campaign was well under way and the economy was on the upswing, and (2) candidates delaying accepting offers until they felt more comfortable returning to the office. But there are other forces at play here too.
We've written previously about how many private equity and private credit firms are holding record amounts of dry powder. Those mountains of cash continued to swell throughout the pandemic as investors sought asset classes with long-term investment horizons. With markets continuing to trend upwards, buoyed by record amounts of fiscal stimulus, it's no wonder that so many private markets firms are now ready to put capital to work. The 239 marketing professionals joining private equity and private credit firms in Q1 will have their hands full in what is shaping up to be a year unlike anyone has experienced before.
Other sectors of the alternative investment industry also experienced a boon in hiring in the first quarter. The sectors that jumped the most in Q1 2021 when compared to Q4 2020 include: Private Fund Group (+42 moves, or +525%), Multi-Asset (+119 moves, or +178%), and Hedge Funds (+63 moves, or +119%). In fact, the only sector that experienced a hiring slump, according to our data, was Wealth Management (-40 moves, or -46%).
We are also beginning to see signs of improvement when it comes to the hiring of racially and gender-diverse marketing professionals. While the industry started from a low baseline--just 21% of all hires in 2020 were non-Caucasian and about a third (33.2%) were female--these numbers are ticking in the right direction with Q1 representing the most diverse cohort of marketing professionals since we began tracking this data in 2018. We will share more data and insights on the diversity front in future newsletters, supported by our amazing DiversityMetrics(TM) team.
We would also like to introduce the DEI Corner, a new section of the newsletter with a compilation of diverse marketing professionals who have been promoted or started new roles in the last quarter.
We strongly believe that these kinds of data and insights on the diversity of the alternative investment industry as we work together to build a more diverse, equitable and inclusive workforce.
As always, we are more than happy to hop on the phone (or on Zoom) to answer any questions and explore opportunities for collaboration.
Here is a selection of recent articles and studies about hiring, marketing and fundraising in the alternative investment industry:
AltAssets: Private capital funds must invest $5.5bn over next five years amid rising LP demand for transparency
Financial Advisor Magazine: ESG Investing Used By 72% Of Institutional Investors, Survey Says
FundFire: BlackRock Confronts Cultural Issues as Current and Former Staffers Raise Complaints
FundFire: Real Estate Managers Mount Wider Diversity Push
FundFire: Women in Alts May Gain from Pandemic Workplace Shifts
FundFire: Institutions Are Feeling the Pressure to Diversify Manager Lists: Report
FundFire: NEPC Releases More Data on Staff and Manager Roster Diversity
FundFire: Manager Diversity Data Reveals Gaps in Corporate Mobility
Institutional Asset Manager: Climate change trumps diversity and inclusion in institutional investor ESG considerations, finds Procensus survey
IP&E: Hedge funds lag behind peers on ESG investment factors - bfinance
Pensions & Investments: BlackRock pledges to conduct racial-equity audit
Pensions & Investments: Some alternative strategies struggle in first quarter following tough 2020
Pensions & Investments: After virus-induced pause, M&A, fundraising to return
Private Equity International: Four areas that will gain ground in PE
Private Equity International: Working towards a more diverse industry
The Wall Street Journal: Private-Equity Fundraising Poised to Bounce Back in 2021
Here are a few of the most interesting data points from Q1:
❖ We tracked 745 marketing
moves in Q1, an 85.32% increase from Q4 2021, and +47% from the 507 moves in Q1 2020, making it the fifth straight quarter that hiring activity has surpassed 400 moves.
❖ The biggest movers and shakers for Q1 include: Private Equity firms (194 moves), Multi-Asset firms (186 moves), and Hedge Funds (116 moves). These are also the three sectors that generated the most hiring activity in 2020 overall, although in a slightly different order with Multi-Asset firms (350 moves) leading the way, followed by Private Equity firms (285 moves), and Hedge Funds (237 moves).
❖ The sectors that jumped the most in Q1 2021 when compared to Q4 2020 include: Private Fund Group (+42 moves, or +525%), Real Estate (+20 moves, or +222%), Multi-Asset (+119 moves, or +178%), Hedge Funds (+63 moves, or +119%) and Private Equity (+86 moves, or +80%). The only sector that experienced a hiring slump, according to our data, was Wealth Management (-40 moves, or -46%).
❖ We continue to also track hiring activity in the more niche sectors of the alternative investment space (see 'New Categories' table). In this category, Secondaries had a strong first quarter with 34 moves (or +29 moves, an +580% increase), followed by Fund of Funds (14 moves, up from zero in the previous quarter).
❖ The geographical data reveals few surprises other than that Brexit does not appear to have significantly affected the demand for UK-based marketing professionals. In fact, hiring in the UK continued to increase in the first quarter of 2021 (162 moves vs. 111 moves in Q4 2019), exceeding the rest of the EU (72 moves vs. 30 moves in Q4 2019). North America (NORAM) continues to dominate hiring activity with more than half (59%) of all the moves in Q1 2021, which is actually an increase of 96.8% from Q4 2019.
Data on Diversity
With diversity emerging as a top-of-mind issue for alternative investment firms in 2020, we take a deep dive using Jensen Partners’ newly launched DiversityMetrics(TM) data visualization technology to see how well the alternative investment industry is improving diversity among the ranks of marketers.
❖ In Q1, we tracked 386 diverse moves (303 female candidates + 83 male BIPOC candidates), representing a little more than half of all marketing moves in the quarter (51.8%). This is a positive trend compared to previous quarters, and a 20% increase from the diversity ratio of 43.2% we recorded for 2020 overall.
❖ From a gender perspective, female moves in Q1 represent 40.6% of all hires, up from 33.1% we recorded for 2020 overall. We also observed that when compared to male moves, female moves increased by 126% from Q4 2020, whereas male moves only increased by ~65% from Q4 2020.
❖ In terms of racial ethnicity, we continue to see Caucasians make up the vast bulk of all marketing moves-- 78.3% in Q1 and 79.8% in Q4 2020. This is a marginal improvement on the 79.4% figure we recorded for 2020. When compared to Q4 2020, we see that in Q1 2021 South Asian hires increased by
about 329% and Black hires increased by about 188%; whereas Caucasian hires only increased by about 82%.
❖ Recognizing the important role that the summer 2020 protests played in raising awareness about racial diversity issues, both globally and specifically in the alternative investment industry, we did a mini-analysis to see if the rhetoric by many alts firms was matched by action in terms of making more diverse hires. Using Q4 2019--Q2 2020 as the pre-protest period and Q3 2020-Q1 2021 as the post-protest period, we observed that the number of Black marketing professionals hired as a percentage of all hires decreased by about 12% from the pre-protest period (3.2% of all hires) to the post-protest period (2.8% of all hires). This suggests a trend in the wrong direction, as Black professionals continue to remain a minority across the alternative investment industry with just 3.1% of all hires in Q1 2021.
❖ In terms of gender and ethnicity, we noted that the following strategies had an extremely low Black male and female moves: Multi-asset (2 male and 2 female hires), Private Equity (1 male and 6 female hires), and Hedge Funds (5 male and 1 female hire). However, when we analyzed Black male and Black female moves during the post-protest period, we observed the following: The number of Black male professionals as a percentage of all male hires increased by 24.37% post-protests (2.36% in Q3 2020 vs. 2.94% Q1 2021) and the number of Black male professionals as a percentage of ALL hires increased by ~15% post-protests (1.52% in Q3 2020 vs. 1.74% Q1 2021). Similarly, the number of Black female professionals as a percentage of all female hires increased by ~22% post-protests (2.44% in Q3 2020 vs. ~3% Q1 2021) and the number of Black female professionals as a percentage of ALL hires increased by ~39% post-protests (0.87% in Q3 2020 vs. 1.21% Q1 2021).
❖ In terms of diversity hiring across strategies, we observed that 21.7% of all hires were non-Caucasian in Q1, up 5.6% from 2020 overall. The following strategies had the highest number of non-Caucasian
hires: Wealth Management (15 or 31.9%, and +50% from Q4 2020), Private Fund Group (14 or 28%, and +366.7% from Q4 2020), Private Equity (46 or 23.7%, and +91.7% from Q4 2020), and Multi-Asset (42 or 22.6%, and+223.1%).
See below for a partial selection of current mandates. Contact us at email@example.com to learn more about each search.
HIRING: $200B Multi-Asset Firm
ROLE: Senior Credit Product Specialist
DESCRIPTION: Our client is looking for a VP/ Principal product specialist who can provide support for relationship managers during fundraising, manage existing investors, provide expertise on products throughout the lifecycle and participate in client pitching. This role requires someone who has the deep product knowledge, and who can successfully manage the LP lifecycle. The successful candidate will be a strong communicator with a resourceful and collaborative attitude, who has the ability to delegate and provide support, ensuring the development and success of the product specialist team.
HIRING: $80B Private Equity and Private Credit Firm
ROLE: Senior Credit Distribution
DESCRIPTION: Our client is searching for a technical credit product specialist and capital raiser to raise assets for the credit arm of the platform. The successful candidate will have deep knowledge across private and structured credit. The preferred candidate will have specialist knowledge of energy and credit and will have a demonstrable track record of raising assets for these strategies.
HIRING: $30B Infrastructure and Credit Firm
ROLE: Senior Credit Manager
DESCRIPTION: Our client is building out a credit distribution team alongside their infra investment distribution team and requires a senior and experienced technical credit capital raiser. The successful candidate will have some understanding of infrastructure strategies and will have a deep track record in credit.
HIRING: $161B Hedge Fund Manager
ROLE: Senior Sales & Client Services, Credit
DESCRIPTION: Our client is looking for a candidate who has substantial credit experience at a buy side firm in a sales and consultant relations capacity. This person will be responsible for identifying and developing a high-quality client base across distribution channels, geographies, and investment vehicles. The successful candidate should have strong communication and interpersonal skills and the ability to cultivate relationships internally and externally.
HIRING: $9.5B Asset Management Firm
ROLE: Managing Director, Institutional Marketing
LOCATION: New York
DESCRIPTION: Our client is looking to hire an investment marketing professional who will support and promote the firm’s offerings. This person will be an integral team member of the marketing team and its fundraising goals and will represent the firm to external investors. This person will maintain ownership of investor and consultant relationships throughout the LP lifecycle. The successful candidate should have 10+ years of experience in private markets, preferably private credit.
HIRING: $20B Alternative Credit & Real Asset Manager
ROLE: MD, Business Development & Fundraising – Western Coverage
LOCATION: Flexible (LA or NYC preferred)
DESCRIPTION: Our client seeks a senior fundraising professional at a buy-side firm with expertise in corporate credit and/or real estate to take ownership of the west coast and/or anything west of traditional mid-west coverage. This person will be responsible for co-working with the Global Head of Business Development in developing and implementing a regional sourcing strategy. Additionally, the candidate will have experience leveraging a diversified platform to cross-sell fundamental strategies across
channels. The successful candidate should have strong communication and interpersonal skills and the ability to cultivate relationships internally and externally.
HIRING: $20B Alternative Credit & Real Asset Manager
ROLE: MD, Business Development & Fundraising – Southern
LOCATION: Flexible (Texas or NYC preferred)
DESCRIPTION: Our client seeks a senior fundraising professional at a buy-side firm with expertise in corporate credit and/or real estate to take ownership of Texas and the broader southern US. This person will be responsible for co-working with the Global Head of Business Development in developing and implementing a regional sourcing strategy. Additionally, the candidate will have experience leveraging a diversified platform to cross-sell fundamental strategies across channels. The successful candidate should have strong communication and interpersonal skills and the ability to cultivate relationships internally and externally.
HIRING: Global Private Fund group expanding into the Secondary Transaction business
ROLE: Global Head of Secondaries
DESCRIPTION: Our client is searching for an experienced secondaries executive who can drive the business from the US and lead origination and execute transactions. The role will also involve building out a team.
We are thrilled to add another award to our collection, this time thanks to the readers of Private Equity Wire who named Jensen Partners the "Best Recruitment Company for Investor Relations & Asset Raising" for the second year in a row in their 2021 European Awards. We look forward to continuing to work with alternative investment firms in Europe and around the world, with a renewed focus on helping those firms make measurable and demonstable progress on their diversity, equity and inclusion efforts.