International portfolio managers - especially Latin American specialists - are hot items for headhunters this year.
The executive recruiters say recruiting by money management firms is strong this year, propelled by the need for the international portfolio managers. But they also pointed out firms are being more prudent with their hiring and avoiding sky-high salary offers.
Most hirings are product-driven. As a result, executive searches for marketing positions are up as well.
The market for investment management personnel had slowed last summer and fall, as firms saw their performance lag the bull market, said Franklin K. Brown, executive vice president and managing director at executive recruiter Handy HRM Corp., New York.
Some firms, afraid of losing business, were reluctant to hire staff, he said. But underperformance was widespread and the chance of any one firm losing a lot of business was unlikely, so many firms began filling positions vacant since the fall, said Mr. Brown.
Another hot spot is the emerging markets area. Some managers are building up their emerging markets staffs, expecting the style to become popular again with investors.
Michael Martinolich, managing director of executive recruiters Smith Hanley Associates, New York, noted some firms are spinning off teams from their international areas, forming groups to focus on the Pacific Rim or Europe.
Peter Kindler, partner in Kenny, Kindler, Hunt & Howe, New York, gave examples of product-driven executive staffing decisions. He said Federated Investors, Pittsburgh, hired a number of staffers to strengthen the firm's international capabilities. And, Putnam Investments, Boston, recently named Tim Ferguson to a new position as senior managing director and head of international equity. Mr. Ferguson was previously chairman of HSBC Asset Management, New York.
On the flip side, Mr. Martinolich noted interest in Eastern Europe and European small-capitalization investing have "cooled down quite a bit." Instead, firms are hiring specialists in markets that have been down, such as Latin America and Japan, because they expect then to turn up and money flows to follow, he said. Additionally, areas like Asia are expected to show economic growth, while Europe's potential is more limited, he said.
A good, experienced emerging markets specialist could command compensation 15% to 30% higher than an international equity manager concentrating on the developed markets, said Mr. Martinolich. However, firms are not throwing money around wildly, he added. There is enough talent around to keep the searches competitive - particularly among Latin American specialists - so salaries are not astronomical, he said.
The emerging markets staff hiring trend is a reversal from last year, said Joan Zimmerman, executive vice president of recruiters G.Z. Stephens Inc., New York. She noted January was a very active month for Latin America searches.
Traditional marketing and investor service functions also are being upgraded both to maintain the client base and to expand in a more competitive market, she said.
"Hiring marketing and investment professionals goes hand in hand," said Mr. Kindler.
The headhunters note investment management job-hopping, while never great, is even less pronounced than in the past. For example, mutual fund companies aren't raiding each other's staffs for star managers as much as they used to, and more experienced institutional portfolio managers are well compensated enough to stay put, they said.
"Movement has been measured and intelligent; I haven't seen anybody lured away by astronomical money," said Handy HRM's Mr. Brown.
Mr. Brown said many firms need to support expansion of product lines with hirings in such areas as technology and compliance. In particular, more money managers are stressing compliance, he noted.
Meanwhile, among applicants, Mr. Martinolich said he notes a willingness to assume the risk of being focused on a specialty, as opposed to the safety of being part of a global investment team.
"These folks are coming to the fore and saying, 'it's not so bad being specialized,'" he said.
