The new skillsets fuelling recruitment in asset management

Digital transformation, data-driven cultures and a hybrid physical-virtual workforce ... These are all part of the changing face of the asset management industry.

One of the big questions across the fund space today is this. How do you get the right talent with the right capabilities to re-invent this new future?

There is intense hiring demand across the industry right now. Mush Ali, Director at OneTen Associates, a specialist recruiter for the fund management sector, says: "The last time I saw it this buoyant was in 2005/2006.”

But one answer comes in a finding from Accenture’s 2020 survey of 250 senior executives at asset management firms. (It included institutional, retail, alternative and hedge funds.)

It points to a skills gap. Its research shows that: 95% of executives agree that an asset manager’s technology, data and digital capabilities will be differentiators in 2025.

In other words, today’s employees must be ready to step away from the mentality of “that’s how we’ve always done things round here” and become part of tomorrow’s story.

“The hedge fund industry right now is on the hunt for talent at all levels in all areas,” adds Mush Ali.

The greatest demand for talent, he says, is for technologists. These include software developers and quantitative analysts, and those with skills in operations functions.

Asset managers today have a pressing need to leverage technologies like automation, artificial intelligence (AI) and analytics in face of growing demands from investors and pressure from regulations.

This means that almost all roles across a hedge fund now need a high level of competency in technology. This is across both front-office investment strategy as well as middle- and back-office operations functions.

It is being driven by the need for cost saving and efficiency, as well as for product development, alpha generation and delivery of a more customised client experience.

The rise of AI means that firms now need to design and manage their “human + machine” environment by matching the right talent to the right needs.

The right people are key to this – even the firm’s accountant today needs to be skilled in SQL and Python.

The talent management onus is to develop a tech-enabled resource pool across all its departments. From leadership to finance, to marketing, to ops and compliance – it needs to be diverse in every sense. Plus have an inclusive and equality-driven culture, and incentive structures that remunerate people for doing the right thing.

Beyond the MBA, MFin, PhD, and statistics degree holders, hedge funds are increasingly picking candidates from a mix of industries and experience levels. A graduate in agriculture or meteorological studies, for example, may be a good fit if the hedge fund company is dealing in agro-commodities.

Firms are changing how they source talent and the way they structure roles to appeal to a broader range of candidates. Many hedge funds stress that they are now looking for tech-savvy candidates with attractive skill sets or relevant experience, rather than filtering the search by which Russell university.

“Historically, many asset managers, as well as others on the buy-side, have viewed technology as a silo — not as an integrated part of the overall firm,” Laurie McGraw, managing director for North American capital markets at Accenture, told Institutional Investor in October 2021.

“[Integrating technology] will help them in what is an increasingly competitive market for tech talent and younger talent. They are looking to be in a stimulating and growing environment where they have the opportunity to participate in the development of the business.”

But there is, what AIMA describes as, a “brewing war for talent” underway right now.

It carried out a market survey of 100 hedge funds collectively managing more than US$520 billion, plua interviews with consultants and hedge fund headhunters.

Its findings showed talent shortfalls in three areas – tech, data and ESG:

• Almost 90% of the total respondents are ‘somewhat’ or ‘very concerned’ about talent retention in the near term. The biggest gaps? Technology, operations, and quantitative analytics.
• With demand for data scientists, quantitative professionals and software engineers at an all-time high, 72% of respondents see the increasing role of quantitative professionals and alt data specialists as ‘very important’ or ‘important’ in shaping industry talent demand. Programmers with experience in MatLab, SQL, Java, Hadoop, Q, kdb+, C#, C++, HTML5, Python and R, among other programming languages, are highly sought after.
• Almost 62% of all hedge fund firms surveyed do not have a dedicated ESG specialist on staff. Finding the right talent is a challenge. Few candidates have the right balance of awareness of issues such as climate change combined with financial savvy. But investor demand for ESG products is making expertise in responsible investing a must-have skill set of the future.

Skill sets are changing. The competition for top talent is growing from technology firms outside of the financial industry. Recent years has seen the hedge fund industry pit itself against the FAANG sector — comprising of Facebook, Apple, Amazon, Netflix and Google — in pursuit of the brightest talent.

Opportunities abound for quants and machine-learning talent open to exploring other industries and use cases.

The job of the asset management industry now is to stay ahead of the curve by adjusting to the new talent reality and persuading them to join it.