About the research
The demand for this report was borne out of the findings of the Agile & Resilient paper conducted in 2020 in partnership with KPMG which focused on talent retention and company culture as part of a wider study into the myriad challenges facing the alternative investment industry at the time. A year on much has changed, requiring the topic of talent to be revisited in more detail.
The market survey that underpins this report was conducted during Q2 2021 and garnered responses from 100 hedge fund managers, accounting for roughly US$520 billion in assets under management (AuM). Just over two-thirds of all respondents are Chief Operating Officers or HR professionals within those firms. An additional 11% manage the investor relations function at their firm. The remainder hold either C-level or other senior management roles at hedge funds or consultants.
To further contextualise the findings of this survey, AIMA canvassed the views of the hedge fund industry through one-to-one interviews with hedge funds, headhunters and consultants. Case studies that underscore some of the themes discussed throughout this report are also offered at the end of chapters one and four. AIMA would like to thank all the participants in this project and particularly those who offered their time for the subsequent interviews that were essential to effectively interrogate the data. Additional thanks go to the members of AIMA’s research committee who guided this project from inception through to publication.
Managing Director, Global Head of Research and Communications, AIMA
Associate Director, Research and Communications
The talent wars are intensifying — As major economies reopen for business, many people in the hedge fund industry find themselves in a strong position to assess new professional opportunities. Almost 90% of the total respondents are ‘somewhat’ or ‘very concerned’ about talent retention in the near term. Strong industry performance in recent years, including the rapid recovery from the market correction that took place in the first quarter of last year, is creating significant demand to bolster teams across various functions, but particularly around technology, operations and quantitative analytics. However, the new flexible working model many employees have come to value means employee compensation is far from the only factor when deciding whether staff members stay or leave, with non-financial benefits more important now than ever.
ESG will be the next hiring frontier — ESG specialists, in all their various forms, are expected to become one of the most in-demand hires over the next five to 10 years. Almost two-thirds of all firms surveyed do not have a dedicated ESG specialist on staff, with another third boasting between one and five ESG dedicated specialists. But, investor demand for ESG products combined with increasing regulatory pressures will make expertise in responsible investing the must-have skill set of the future.
Technology now permeates every facet of hedge funds — The need to apply a technology-focused solution to almost all functions within a hedge fund – from front-office portfolio management through to back-office treasury processes – is a near-universal truth across the industry. Primarily, this has shaped hiring decisions to create intense pressure to bring data scientists and quantitative analysts into investment strategies. It is also changing the skill sets required for other roles within the firm’s operations that previously did not have such a strict need for technology acumen.
The desire to improve DE&I is a driving force in hiring decisions — Almost all the hedge funds surveyed describe improving DE&I as a ‘very important’ or ‘important’ theme shaping how the hedge fund industry sources talent. Firms are putting this into practice in their hiring policies with a wide range of strategies to remove biases and maximise opportunities to uncover hidden gems among candidates that might have been missed by only drawing on traditional talent pools. Although the industry, along with the wider financial sector, could always do more, this chapter includes several case studies of how progress is being made to make the alternative investment sector an inclusive working environment.
Can company culture survive the end of full-time office working? — The assimilation of new hires within the company’s culture and training junior staff are the biggest challenges when recruiting in the remote working environment, according to more than two-thirds of respondents. Concerns primarily revolve around ensuring junior staff still develop the hard and soft skills in a digital setting that they would have learned by being in the office full time. Despite these challenges, the survey data suggests hybrid working will become the norm for many. Hedge funds should consider accommodating flexible working while facilitating the effective communication and close collaboration within and across teams that comes from working in the same physical space.
Podcast: The Long-Short
The Long-Short is a podcast by the Alternative Investment Management Association, focusing on the very latest insights on the alternative investment industry.
Each episode examines topical areas of interest from across the alternative investment universe with news, views and analysis delivered by AIMA’s global team, as well as a host of industry experts.
Episode 5 of the show welcomes our first external guest, Mush Ali, Director at OneTen Associates, a specialist recruiter for the fund management sector. Ali, gives his perspective on how the hedge fund recruitment market has evolved over the past decade offering guidance to firms looking to hire prospective candidates looking for their next career move.
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This podcast is the sole property of the Alternative Investment Management Association (AIMA). This audio production and content are intended as indicative guidance only and are not to be taken or treated as a substitute for specific advice, whether legal advice or otherwise. AIMA permits use or sharing of the content in media or as an educational resource, provided always that proper attribution is made. The rights in the content and production, including copyright and database rights, belong to AIMA.
Gaining an edge: How hedge funds are navigating the new talent landscape is available to members and non-members of AIMA. For more information about the report, please contact AIMA’s Global Head of Research and Communications, Tom Kehoe ([email protected])