Market Overview
It has been another incredibly busy year of hiring across our asset management client base and this did not change in Q4. Naturally, several asset managers with large cost bases were more cautious with the economic climate but in general, the market remained very busy.
There was a noticeable decrease in job flow in the middle of the quarter which coincided with the delayed autumn statement but firms were being more cautious as opposed to freezing hiring all together.
As always, several ongoing processes slowed towards the end of the quarter with festive activities starting to kick off. With the majority of firms opting to do in-person interviews again at some stage in the process, often towards the end, the festive season coupled with train strikes meant that a lot of processes ran into the new year.
Private equity has continued to see a lot of growth throughout 2022 with fundraising remaining very strong. With Russia’s invasion of Ukraine affecting the economy, fundraising has become harder which has had an impact on hiring trends as the year has progressed but in general, we have seen a lot of volume across support functions. Of course, the economy will affect PE firms differently depending on firm size and what stage they are at. Larger funds fare better with fund-raising efforts in this economy, which has been reflected in the finance hiring trends across these firms as the year has progressed. Noticeably, several small-mid market firms have had to prioritise front-office hiring with support functions taking a back seat.
Private credit continues to be a growth strategy with hiring across these funds extremely busy. We are seeing the continued growth of finance functions across these strategies with these roles often highly desirable to candidates.
There has been a lot of hiring across ESG/sustainable investing and as a result, we have seen a lot of finance roles across asset managers big in this space. These are often newly created vacancies where support functions look to keep up with the growth of the business. Generally, these roles do not require any knowledge of ESG/sustainable investing but more often than not, these employers will favour individuals who are brought into their mission.
Whilst Hedge Funds have struggled in general during 2022, their declines have been slightly less than traditional equity and fixed-income markets. We have seen steady volume across our Hedge Fund client base depending on the Hedge Fund strategy.
Considering the effect of the economy on our industry, Bruin’s buy-side Finance, Tax & Audit team arranged and hosted a seminar in November, with guest speaker Chris Williams, economic consulting lead from Grant Thornton. He provided an overview of the macroeconomy, how the market will react and expected government policy, whilst also addressing the challenges the economy faces now, into the future and what this means for the asset management industry. If you would like a copy of the PDF summarizing this event, please do ask!
CANDIDATE MARKET OVERVIEW
The market has remained candidate led throughout most of 2022 but with the effect lessening throughout the year. Q4 continued to be candidate-driven but with bonus season approaching for the majority of asset managers, this can be a time of year when more individuals dip their toe into the market. With the rising cost of living, this effect was more prevalent this year as candidates begin to plan for what is likely to be a more financially challenging year for most in 2023.
On the flip side, we are seeing more candidates motivated by money which has meant sometimes these individuals are not considering opportunities that may have previously appealed to them.
The most difficult vacancies throughout 2022 have been those looking for 0–2-year PQE individuals from practice and the rising cost of living and current economy have emphasised this. These candidates have had so many options to move in the buoyant market of the last 21 months that the individuals who have not already made the move in-house are being even more specific about the types of roles they will consider. Generally, fund/investment finance, commercial finance/FP&A and valuations roles in alternative and sustainably focused asset managers have been the most attractive to these candidates. Of course, Q4 brings with it a huge number of newly qualified ACAs from September 2019 intake so these roles have seen more applicants this quarter.
The more senior the role, the less effect a candidate-driven market is generally lesser. The appetite to move at the mid-senior end has also increased as 2022 has progressed and during Q4, we have seen a lot of interest at this level. We continue to see more senior asset management finance professionals open to discussing roles at AM/PE firms with a strong ESG presence.
Role Profiles
We have seen a high volume of financial accounting/control roles during Q4 at all levels. For many new quals coming out of the Big 4, these roles are not as attractive as other more analytical or commercial roles. We continuously remind these individuals that these roles are an excellent first step into the industry if they want to progress down the CFO route. These roles were particularly prevalent in the early part of the quarter or rolled over from Q3 as firms look to sure up these teams before/during year-end.
Where there have been struggles to find enough candidates at the junior end in control functions, we have seen clients considering part-qualified candidates, individuals with no FS experience and often individuals who require sponsorship to work in the UK.
There has also been an increase in tax roles, predominately newly created roles within the alternative tax space. This is down to firms looking to bolster their in-house teams to support transactions, rather than purely leaning on support from consultancy. These can often be challenging searches due to the niche and technical nature of the tax space. These roles heavy on the transactional side are usually more attractive to candidates, particularly from practice, however, this brings its challenge in finding an individual with particular asset class experience (private debt being the most challenging). Roles which are fully compliance and reporting focused are often difficult to attract individuals into in the asset management and PE space.
Fund accounting/finance has been busy as ever with the continued newly created volume on the alternatives side. We have seen these roles at all levels, part-qualified up to the fund control level consistently. The more junior end tends to be easier to find a higher volume of candidates due to clients being open to individuals coming from external audit or fund administrators, without the specific fund/asset class experience. The more senior end more often than not require individuals with specific experience but there is a strong candidate pool across the alternatives space for these candidates. Again, private debt is the most difficult experience to find in this space but these roles are very attractive to candidates if they will consider individuals from a PE, Real estate or traditional funds background. We have seen an increase in the amount of traditional fund accounting/oversight roles in Q4, looking for individuals with daily NAV experience.
The FP&A and Finance Business Partnering space has been slightly less busy at the junior end. We usually see a constant flow of these roles at the newly-qual level but Q4 saw a slight decrease, particularly on the traditional asset management side. This is likely to be a result of these firms looking at their cost bases with the economy in mind, and hence not adding junior individuals to these more value add teams. We have, however, seen several newly created business partnering roles at the mid-senior end with a focus on supporting alternative/private markets investment teams. These asset classes continue to be a big focus for most asset managers and hence, individuals who can support business decisions from a finance perspective become more important. Finding business partners with a specific focus on private markets can be challenging but again, these roles are attractive to candidates if the client is willing to consider individuals who are not specialists.
Predictions
The market at the start of 2023 is very difficult to call considering the economy, however, we are hearing very positive noises from the majority of our client base. There is no doubt asset managers with large cost bases will be more vigilant when hiring into support functions, however, the majority have shown no signs of any sort of hiring freezes.
There will no doubt be several small-mid market PE firms being slightly more cautious in the first parts of 2023 due to fundraising challenges caused by high inflation and rising interest rates. The amount of uncommitted capital that PE firms are sitting on is record high as firms look to see how the economy reacts before committing this.
We expect there to be a high volume of newly created roles across finance and tax teams in asset managers big in the renewables / sustainable investing space, as these support functions look to keep up with firm growth.
Candidates will be more particular when moving due to rising costs of living, however, with bonuses approaching there is always movement in Q1 as a result.