Turnkey Entry/Lift Out Teams – Keys to Success
One of the questions our recruiting team frequently is asked is “what are some of the characteristics of a successful boutique asset management firm and what are large asset management firms looking for in a lift out?”
Our research department and senior human capital management consultants have worked with investment teams to get them prepped or coached for the big game. Strategic Business Group Acquisition (Lift Outs) Lift-outs are a continued focus for the large global asset managers that are seeking “turnkey entry” into targeted markets. These global behemoths are seeking to complement their commanding distribution franchises with niche strategies that will gather more mindshare of their clients and ensure a relationship that approaching full service. The ban on proprietary trading at banks created an opportunity for hedge funds to capture the exodus of talent. Hedge fund assets grew a record $149 billion during the last three months of 2010 according to HFR Research. (January 19, 2011) The flows suggest investors are taking a more conservative posture by sticking with established players. Event-driven funds which focus on mergers and acquisitions were also popular, pulling in $14 billion during 2010.
Pinnacle Perspectives
The investment management market is more competitive than ever and in today’s global business environment, success is driven by the talent, vision and leadership capabilities of senior executives. A survey of the top alternative asset managers by Tower Watson in June of 2010 revealed that the there continues to be increased use of alternative investments by pension funds and other institutional investors worldwide, with around half of all assets managed by these alternative investment managers are managed on behalf of pension funds. We see this trend continuing unabated throughout 2011 and beyond and are in the midst of discussions with numerous global asset managers seeking to conduct “lift outs” and working with teams of investment professionals that are seeking to lift out. (link to the Towers Watson survey can be found here)
Expertise in Helping Our Clients Build Their Business The investment needs of asset managers and wealth management firms are constantly shifting in response to the changing investment environment conditions. Commercial asset management firms, venture funds, hedge funds and private wealth management firms are all re-evaluating their market strategies. We have successfully advised both local and global organizations, helping them to assess and recruit the best-in-class portfolio managers and investment officers to support their investment profile across the full spectrum of traditional and alternative asset classes, as well as ensuring that they have the best executive and functional leadership team to support the infrastructure of the business. A Snapshot of 2010 - 2011 and Beyond Competitive hedge funds and alternative investment managers bulked-up on distribution muscle in 2010, seeking to displace traditional mandates with absolute return-oriented strategies. Hiring activity increased roughly 82% from its bottom in 2009. Global and emerging markets equities and high-yield fixed income management talent was heavily recruited last year with refugees streaming out of prop desks and bank units due to regulatory reforms – we see this continuing in 2011. The top 20 investment managers gathered 91% of the assets in the marketplace. Hiring in 2011 continues to be focused on “bolt on” acquisitions or acquiring teams of investment units that can deliver unconstrained, alpha-generating global investment strategies for institutional clients and the private wealth management channel. Compensation continues to be a challenge as investment managers seek to acquire talented investment industry professionals at a discount to fair market value and the “top 10%” profile candidates are still being heavily recruited into positions are a premium from the firms focused on attracting the best and brightest in the investment management industry. Global portfolio manager and analysts are seeing an immediate opportunity for increased compensation as global equity strategies (traditional and alternative) are the focus for the investment community.
Pinnacle Careers has been instrumental in helping to generate top line growth at global asset management organizations by providing access to talent and continued success.
