GLOBAL – Cerulli Associates says asset managers are starting to recruit again – though they are being “more strategic” in their choice of staff.
“Managers are lifting hiring freezes that have been in place for years,” Cerulli said in a report on the industry. “Hiring activity has picked up, and firms are being much more strategic in their approaches to adding new personnel.”
Client servicing, it said, is a “growing profession. “Many firms have expanded their client services staff and are considering new hires going forward.” It expected “greater streamlining” to boost efficiency.
Cerulli has surveyed industry participants and has put a figure on the influence of consulting firms. It found that around 35% of new institutional assets “come directly through pension consultants”.
“After adding assets coming from existing clients who rely on consultants, the percentage of assets being placed under the direction of a consultant rises to roughly 47%.”
The report says pension funds and consultants are “overwhelmed” with information about an ever-growing list of fund managers. They “seek out many reasons to reduce the number of managers under consideration”. Cerulli says relationship management is vital and “can often be the distinguishing factor that keeps a firm in a search”.
Around 33% of managers surveyed did not have a dedicated consultant relations effort – and the report adds that the best approach is to match a single representative with a particular consulting firm.
And the survey found that asset managers win mandates mostly due to “pure turnover” by schemes of their managers. “This turnover places a significant portion of the current marketplace in play, creating an increasingly competitive environment in which terminations are becoming more commons and turnover among managers is high.”
Cerulli found that asset management firms have one salesperson for every six billion dollars of institutional assets under management.