AIMA: talent management in the hedge fund industry
05 November 2021 UK
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90 per cent of hedge funds are ‘somewhat’ or ‘very’ concerned about talent retention in the near-term, according to new research published by the Alternative Investment Management Association (AIMA).
In the survey, ‘Gaining an edge: how hedge funds are navigating the new talent landscape’, AIMA explores how hedge funds are currently sourcing and retaining talent in the context of the COVID-19 pandemic and the dubbed ‘Great Resignation’.
Using industry data from a market survey of 100 hedge funds collectively managing more than US$520 billion, AIMA found that concerns over talent retention are particularly rife in the areas of technology, operations and quantitative analytics.
The survey notes that the hedge fund industry now requires a high level of competency in technology across the majority of roles, from front-office investment strategy to middle and back-office operations functions, as was recently discussed by AIMA and other industry professionals with Asset Servicing Times.
In addition, ESG specialists are expected to become one of the most in-demand hires over the next five to 10 years as regulatory pressures increase.
62 per cent of surveyed hedge funds say they do not have a dedicated ESG specialist in their personnel — however, many also say they are planning to add expertise in this area in the next 12 months.
In terms of talent sourcing, almost 90 per cent of hedge fund survey respondents determined diversity, equity and inclusion to be an ‘important’ or ‘very important’ theme within the industry.
Looking at talent management and retention, the majority of participants say they are promoting a healthy work-life balance and placing a high value on non-financial benefits, for example, flexible working models.
Furthermore, the majority of hedge funds say they believe that hybrid working will become a permanent working model, although this presents challenges in assimilating new hires into company culture and training junior staff.
AIMA also notes regional differences in talent management. For example, Asia Pacific hedge funds are seeing talent migration around its traditional financial hubs, while North America is experiencing a growth in the provision of non-financial benefits to ensure talent retention.
Jack Inglis, CEO of AIMA, says: “With the eyes of the world currently on our financial and political leaders as they discuss how best to move to a more environmentally sustainable footing, this report demonstrates how hedge funds are also playing their part by investing in their ESG capabilities.”
“The increasing demand for responsible investment specialists across the alternative investment industry is a key finding of this paper and a theme that we expect to remain prominent for the foreseeable future.”
Tom Kehoe, managing director and global head of research and communications at AIMA, adds: “The topic of talent management has always been top-of-mind for hedge funds but never more so than in recent months in the context of the COVID-19 pandemic.”
“This report provides timely insights as to how the hedge fund industry is fostering its key asset — its people, illustrating the opportunities that exist for hedge funds seeking to gain an edge in how they recruit and retain talent.”
In the survey, ‘Gaining an edge: how hedge funds are navigating the new talent landscape’, AIMA explores how hedge funds are currently sourcing and retaining talent in the context of the COVID-19 pandemic and the dubbed ‘Great Resignation’.
Using industry data from a market survey of 100 hedge funds collectively managing more than US$520 billion, AIMA found that concerns over talent retention are particularly rife in the areas of technology, operations and quantitative analytics.
The survey notes that the hedge fund industry now requires a high level of competency in technology across the majority of roles, from front-office investment strategy to middle and back-office operations functions, as was recently discussed by AIMA and other industry professionals with Asset Servicing Times.
In addition, ESG specialists are expected to become one of the most in-demand hires over the next five to 10 years as regulatory pressures increase.
62 per cent of surveyed hedge funds say they do not have a dedicated ESG specialist in their personnel — however, many also say they are planning to add expertise in this area in the next 12 months.
In terms of talent sourcing, almost 90 per cent of hedge fund survey respondents determined diversity, equity and inclusion to be an ‘important’ or ‘very important’ theme within the industry.
Looking at talent management and retention, the majority of participants say they are promoting a healthy work-life balance and placing a high value on non-financial benefits, for example, flexible working models.
Furthermore, the majority of hedge funds say they believe that hybrid working will become a permanent working model, although this presents challenges in assimilating new hires into company culture and training junior staff.
AIMA also notes regional differences in talent management. For example, Asia Pacific hedge funds are seeing talent migration around its traditional financial hubs, while North America is experiencing a growth in the provision of non-financial benefits to ensure talent retention.
Jack Inglis, CEO of AIMA, says: “With the eyes of the world currently on our financial and political leaders as they discuss how best to move to a more environmentally sustainable footing, this report demonstrates how hedge funds are also playing their part by investing in their ESG capabilities.”
“The increasing demand for responsible investment specialists across the alternative investment industry is a key finding of this paper and a theme that we expect to remain prominent for the foreseeable future.”
Tom Kehoe, managing director and global head of research and communications at AIMA, adds: “The topic of talent management has always been top-of-mind for hedge funds but never more so than in recent months in the context of the COVID-19 pandemic.”
“This report provides timely insights as to how the hedge fund industry is fostering its key asset — its people, illustrating the opportunities that exist for hedge funds seeking to gain an edge in how they recruit and retain talent.”
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