Q4 Newsletter: Not Even the Great Resignation Can Slow This Hiring Spree
|When I started working in executive search 20+ years ago, the alternative investment industry was still in its infancy. In 2008, at the beginning of the Great Recession, total alternative assets under management were $3.1 trillion. By 2020, assets had more than tripled to $11.5 trillion as investment firms raised ever-more funds and brought in an ever-larger share of institutional capital. |
Much of the credit for this growth belongs to marketing professionals, many of who, spend their days crisscrossing the world meeting with investors and raising capital. If investment performance is the engine that keeps the alternative investment universe going, then marketing and distribution pros are undoubtedly the fuel (or battery) that powers the engine.
Looking back today it seems obvious, but when I started Jensen Partners in 2011, many scoffed at the idea of a recruitment firm that specialized in marketing and distribution professionals. All these years later, I’m pleased to report that the demand for marketing talent is enormous and thriving.
Since 2016, the Jensen Partners team has tracked more than 6,500 marketing moves across the alternative investment industry. More than two-thirds of these moves have come in just the last two years, with a record 2,645 moves in 2021 alone. In fact, we’ve hired 18 data scientists in the last two years just to keep up with all the activity!
While the Great Resignation is constricting hiring across industries, alternative asset marketing and distribution professionals have witnessed a pronounced hiring boom as more firms worldwide realize how critical a sophisticated marketing team is to their long-term success. We see several tailwinds supporting this labor market expansion for years to come:
- Alternative investment strategies have grown more complex, requiring a larger team of marketing professionals with unique skillsets and highly specialized experience. Marketers today are expected to know the ins and outs of whichever strategies they are trying to sell to investors, whether private credit, infrastructure, ESG, SPACs, crypto or the next big investment trend. (See our Q2 2020 newsletter on product specialists) Oftentimes, these marketing professionals see huge payouts for their strategic skills. In total, our data analytics team crunched compensation numbers for 2021 and estimated that firms boosted payouts for these pros between 20 and 40 percent. ( See my compensation comments in Institutional Investor)
- The largest alts firms have transformed into corporate behemoths, with many of them going public and increasingly competing head-to-head with tech firms for talent at all levels of the organization. This has had a spillover effect on smaller and mid-sized firms, which recognize that they also need sophisticated marketing teams in order to be attractive to investors.
- The COVID-19 pandemic has changed people's perceptions about their relationship to work. The whole-scale shift to working from home created an opportunity for marketers to take on different roles that allowed them to get out of the city and be closer to family. The growing acceptance of remote work has also created momentum for marketers to follow their passions and take on more challenging roles. (see our Q3 2020 newsletter on how COVID-19 reshaped the hiring landscape)
- The widespread protests for racial justice have forced alts firms to prioritize their treatment of employees, with an increased focus on DEI both internally (i.e., employees) and externally (i.e., investors). Many marketers — especially those from a diverse background — voiced their displeasure with current practices by switching to firms with more robust DEI programs and policies. As we've said before, "this isn’t a moment, but a movement," signaling further changes to business and investment practices in the near future. (see our September 2021 newsletter on DEI efforts among credit firms)
- The recent shift among many alternative investment firms to target retail investors for the first time has also had a direct effect on the marketing function, which generally focuses on institutional allocators. To reach the retail market, we are now seeing many alts firms poaching marketing talent from the big wirehouses, sometimes by scooping up entire teams. (see our Q3 2021 newsletter with a spotlight on the retail market)
We have discussed these and other trends in previous newsletters. Still, we think it’s essential to take a moment and recognize how much the alternative investment industry (and the marketing professionals who power it) has evolved in recent years. In many ways, alts firms enter the post-pandemic world stronger than they were before — a testament to the ability of marketers to earn and maintain investors’ trust. For their efforts, marketers have come out stronger too --- better compensated and in higher demand than ever.
Yet, despite the boom, significant labor market frictions still exist. We continue to find woeful underrepresentation of women and people of color in nearly every corner of the alternatives industry. While we’ve tracked progress in many areas recently, there is still much work to be done. But the path forward is clear, and the Jensen Partners team is here to help alternative investment firms at every step of the way.
Here is a selection of recent articles and studies about hiring, marketing and fundraising in the alternative investment industry:
New Private Markets: A guide to regs and frameworks
New Private Markets: Private debt funds grapple with SFDR
Responsible Investor: RI 2022 Expectations: What’s going to be big for responsible investors this year?
Responsible Investor: RI 2022 Expectations: What's set to shape the sustainable debt market this year?
The Wall Street Journal: SEC Pushes for More Transparency From Private Companies
The Wall Street Journal: SEC Seeks More Disclosures From Private-Equity and Hedge Funds
The Wall Street Journal: The ESG Regulation Picture for 2022: Five Key Questions for Business
Q4 Data Highlights
|Here are a few of the most interesting data points from Q4 2021:|
|❖ We tracked a total of 600 marketing moves in Q4, a 17.81% decrease from Q3 2021 but a nearly 50% increase on the 402 moves tracked in Q4 2020. This makes Q4 2021 the eighth straight quarter that hiring activity has surpassed 400 moves. |
❖ For 2021 as a whole, we tracked a record-high of 2,645 moves. This is +51.2% over the 1,749 moves in 2020. While some of this increase is thanks to our expanded database and improved tracking tools, our conversations with financial professionals across the industry confirms that there are more hires and departures than ever.
❖ The biggest movers and shakers in Q4 included: Private Equity (145 moves), Multi-Asset (134 moves), Credit (83 moves), and Hedge Funds (71 moves). These are also the four sectors that generated the most hiring activity in 2021, with Multi-Asset (672 moves) on top followed by Private Equity (603 moves), Hedge Funds (347 moves), and Credit (227 moves).
❖ When compared to the same time period last year (Q4 2020), several sectors experienced significant boons in hiring according to our data. Private Fund Groups led the way with an 887.59% increase (or +71 moves from Q4 2020), followed by Real Estate +122.22% (or +11 moves), Multi-Asset +100% (or +67 moves), Credit +93.02% (or +40 moves), Private Equity +34.26% (or +37 moves), Hedge Funds +33.96% (or +18 moves), and Infrastructure +25.00% (or +3 moves). According to our data, Wealth Management is the only sector with a slump in hiring activity compared to Q4 2020, experiencing a 73.56% decrease (or -64 moves); whereas hiring among Fund of Funds remained consistent year-over-year.
❖ Similar to previous quarters, we continue to also track hiring activity in the more niche sectors of the alternative investment space. Specifically, we continued to see high levels of hiring in the Secondaries space with 23 moves in Q4, bringing the 2021 total to 120. This is comfortably more than Real Estate (104 moves in 2021) or Fund of Funds (28 moves), making it one of the fastest-growing sectors of the industry.
❖ The geographical breakdown of hiring activity remained roughly the same between 2020 and 2021, with modest increases across the board. We have yet to see any sizeable Brexit effect that may suggest London has lost its place among the world's major financial centers.
Data on Diversity
|With diversity continuing to be a top-of-mind issue for alternative investment firms, we take a deep dive using Jensen Partners’ newly launched DiversityMetricsTM data visualization technology to see how well the alternative investment industry is improving diversity among the ranks of marketers.|
❖ In Q4, we tracked 291 diverse moves (211 female candidates and 80 BIPOC candidates), representing 48.50% of all marketing moves in the quarter, a significant increase compared to Q4 2020 (33.13%). However, compared to Q3 2021, it's a step down from 387 diverse moves (304 female candidates + 83 male BIPOC candidates), which accounted for 53.01% of all marketing moves in the quarter.
❖ For the year, there were 1,338 diverse moves (1,031 female candidates + 307 BIPOC candidates), representing just over half (50.59%) of new hires in 2021. While the number of women entering the industry is encouraging (38.98% of all hires), the alternative investment industry has a long way to go in terms of racial diversity.
❖ Caucasians once again made up the vast majority of hires in 2021 (77.35%) with East Asian (263 moves, 9.94% of total) the only ethnicity to crack 100 moves for the year. There continues to be woeful representation in the industry for marketers who are South Asian (96 moves, 3.63%), Black (82 moves, 3.1%), Middle Eastern (45 moves, 1.70%) or Hispanic (40 moves, 1.51%).
Jensen Partners' New Product Offering: DEI Market Mapping
|We work directly with senior investment professionals and senior marketers to identify, attract, and hire the industry’s most accomplished diverse professionals. |
Over the last decade, we have built a dataset, which includes verified demographic data for more than 25,000 investment and distribution professionals from across the industry, including 8,000 who self-identify as having a diverse background across more than 100,000 positions.
We harness that data to support the build-out of diverse investment and marketing teams.
New DiversityMetrics™ Mandate
HIRING: $12B Global Infrastructure Fund
MANDATE: DIVERSITY MARKET MAPPING via DiversityMetrics™
EXECUTION: Market map every self-identified diversity candidate from Associate to Managing Director across infrastructure investments, with the purpose of creating a long-term pipeline for diverse candidates to interview and hire.
LOCATION: All continents
DESCRIPTION: Our client is one of the leading Global Digital Infrastructure Funds and is looking to add multitudinous hires across investments spanning North America, London and Asia. The successful candidates will be infrastructure investment specialists with relevant sector experience across digital / telecommunication infrastructure or related investment channels. They will have hands-on investment origination and deal experience to work with an established global team of over 200 people. Diversity initiatives are a key priority for this progressive and highly innovative infrastructure fund.
See below for a partial selection of current mandates. Contact us at email@example.com to learn more about each search.
|HIRING: $300B AUM Private Equity and Credit Fund |
ROLE: Senior Relationship Manager
DESCRIPTION: Our client is a leading private credit, private equity, real estate, and infrastructure firm that is looking to add a relationship manager. The successful candidate will have a proven track record of operating as a real team player, consistently thinking of the broader distribution of our client’s products, effectively a strategic account specialist drawing on the experience and relationships of other marketing professionals on the platform.
HIRING: $100B AUM Private Equity and Credit Fund
ROLE: Senior Relationship Manager
DESCRIPTION: Our client is a leading private credit and private equity firm looking to add a relationship manager with a proven track record of selling into private credit investors across the East and West Coast. This role involves travel and will require a consultative hand-holding approach to educating the LPs on the firm’s credit portfolios.
HIRING: $200B AUM Private Equity Fund
ROLE: Head of Consultant Relations
DESCRIPTION: Our client is a leading private equity firm looking to add a Head of Consultant Relations to its wider distribution platform; we are searching for an individual with a proven track record of selling into private equity consultant relations specialist at all levels – field, research, and CIO. The role involves travel and will require a strong track record of selling into the gatekeepers at tier 1 and tier 2 consulting firms.
HIRING: $80B AUM Private Credit Fund
ROLE: Head of Consultant Relations
DESCRIPTION: Our client is a leading private credit firm that is looking to add a Head of Consultant Relations to its wider credit platform. The successful candidate will have deep relationships with consultants who cover the credit products, specifically private credit products. In addition, the preferred candidate will develop and execute a business plan to engage existing and new consultant relationships at tiers 1-3 consulting firms.