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Talent War to Drive 15% Bump in Asset Management Comp

November 17, 2021  

By Mariana Lemann

The war for asset management industry talent is set to persist into the new year, forcing firms to dig deeper into their pockets to attract and retain personnel, executive recruiters say.

“Executives are more confident about growth opportunities in the money management business,” said George Wilbanks, founding partner at executive recruiting firm Wilbanks Partners. “They are creating new roles to take advantage of those growth opportunities.”

Asset managers are preparing to bump up pay packages: Based on its executive search work and anecdotal evidence, Wilbanks Partners expects asset management compensation increases to reach approximately 15% in 2021.

Compensation consultancy Johnson Associates is also predicting incentives in asset management to increase by as much as 15% this year. In 2020, those incentives increased by 5% at the most, according to Johnson.

Increases at asset managers often follow similar pay bumps at banks and other sell-side firms, said Wilbanks.

“If Wall Street on the sell side starts to see inflating compensation, whether it is justified or not, buy-side professionals, broadly speaking, money managers, will have inflated expectations for their own compensation,” he said.

Earlier this year, major banks such as Goldman Sachs, Citigroup, Deutsche Bank, Bank of America and J.P. Morgan Chase increased junior bankers’ salaries, Bloomberg reported. Hiring packages for some roles have reached eight-figures, according to an independent recruiter cited in a separate Bloomberg report last week.

“Firms are talking about rising turnover and beginning to think about paying defensively because of that,” Wilbanks added.

Sixty-one percent of FundFire readers who took part in August poll indicated that they were considering changing jobs.

“We’ve told people that if you need an office for doing work from, if you don’t want to work in the house, we’ll get you an office. If you don’t want to work in an office and work in your home, fantastic – work in your home.”Steven McClurg Walkyrie Investments

The varying approaches companies have taken to reopening offices or coming up with hybrid work schedules have also prompted many workers to reevaluate their careers and assess other job opportunities.

“The surprising thing is how big of a deal this remote working is. It is not just the convenience,” said Alan Johnson, managing director at Johnson Associates. “It is also a signaling issue – are you a modern firm that kind of understands it? [Or] are you kind of an old-fashioned firm?”

Firms that stick with traditional pre-pandemic-like schedules will have to offer more competitive salary and benefit packages to attract talent, Wilbanks said.

“Firms that are demanding five days a week in the office are probably going to pay a premium,” he said.

Adela Ghinet, who joined Harbor Capital Advisors as a managing director five months ago from Jackson National Asset Management, where she was a senior analyst, has noticed a greater competition for job candidates among hiring firms.

“If these firms feel like they found the right candidate, … I do think they’re going to make an offer that is more appealing and exciting,” she said.

The option to work remotely has also given candidates more places to shop for jobs.

“With remote work, you can live anywhere, so that the pool of companies you could work with may be much bigger than it was two years or five years ago,” Johnson said “You overlay that with surging markets, it’s a very active market for talent. Many of our clients, with hindsight, kind of wish they had done more hiring in 2020.”

Despite the competition, managers are still finding ways to fill their benches.

Alternative asset management firm Valkyrie Investments –which manages about $650 million across strategies that include a private fund that invests in Bitcoin, a Bitcoin futures exchange-traded fund and a hedge fund – assembled a team of more than 20 people over the past year to work on investment strategies focused on cryptocurrencies.

The firm’s chief investment officer, Steven McClurg, tapped his network to draw professionals from firms like Rydex, J.P. Morgan Asset Management, UBS Asset Management, Neuberger Berman, Goldman Sachs as well as former colleagues from Guggenheim Investments, where he worked from 2009 to 2014.

Valkyrie opted to allow recruits to decide where they want to work. The firm set its headquarters in Nashville, Tennessee, and has offices in Chicago and Miami. But it also has workers in Maryland and Puerto Rico.

“We’ve told people that if you need an office for doing work from, if you don’t want to work in the house, we’ll get you an office,” McClurg said. “If you don’t want to work in an office and work in your home, fantastic – work in your home.”

Along with a high degree of flexibility, Valkyrie has modeled its pay packages in line with asset management peers.

“What people are more interested in is getting a piece of the company,” McClurg said. “We’re in a high-growth industry, and we’re a high growth company. Offering equity compensation and incentives is probably the thing that drives us the most.”

Originally posted by FundFire

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