Study Shows Rebound in US Institutional Investment Manager Hires

(February 7, 2011) — US institutional investment manager hires have rebounded in 2010.

“This is great news – it’s gratifying that following 2009, which was such an odd year in terms of hiring activity, there’s been such a rebound in the hiring activity of alternative investments, namely hedge funds, and equities,” David Holmes, a Partner and Research Director at Eager, told aiCIO. While 2009 reflected a pause in the use of alternative investments, Holmes indicated that he fully expected the decline in activity was a pause and not a retreat from the asset class.

According to a report by Tracker Hiring Analytics, new mandates placed by US fund sponsors increased 16% in number and 37% in dollar terms.

“Fund sponsors’ implementation of LDI, alpha-beta separation and hedging against inflation are evident in some of the mandates that saw increased placements in 2010,” David Eager, Partner at Eager, Davis & Holmes, a Louisville-based consultant to investment managers, noted in a statement. He added that as predicted, there has been a continued high demand in a range of specialty areas, highlighting the need for marketers to focus on consultative selling to meet fund sponsors’ changing needs, he said.

The study found that asset classes posting increased hires in 2010 relative to 2009 include US active equity, international active equity, alternative investments and real estate. US active fixed income hires, however, declined from a high level of placements seen in 2008 and 2009, but remained strong relative to prior years, the study noted. “Increased hiring opportunities for US active equity managers was a bright spot for an asset class that experienced net outflows for much of 2010,” Holmes said in a statement. “Fund flows don’t always correspond with hiring opportunities because investment style and investment manager changes or terminations can drive hiring activity.”

The analysis is based on Eager, Davis & Holmes’ Tracker Hiring Analytics database, which gathers and analyzes information on the investment mandates that institutional investors place with third party investment managers.