Domestic money managers burned in 2000 and 2001 by a lack of attention to their fixed-income departments are hiring additional investment professionals in record numbers, according to executive search professionals.
Indeed, Russell Reynolds recruiter Richard Lannamann said searches for positions in fixed income were up 60% in 2001 from 2000.
An informal survey of three recruiters showed 18 searches last year, with a fourth recruiter declining to identify the amount of searches she worked on in 2001.
In addition to filling rewritten job descriptions, firms are hiring new people to handle a multitude of talents the firms did not possess, said Jane Marcus, partner in the Chicago office of Heidrick & Struggles. The moves all share the goal of a "general strengthening of talent," she said.
Among the recent placements gathered by Pensions & Investments are:
* Marc Seidner joined Standish Mellon Asset Management, Boston, as head of fixed-income strategy, replacing Caleb Aldrich, who left the firm for personal reasons, said Pascale Wiedenroth, company spokeswoman. Also, John McNichols was named director of global fixed-income research, a new position. Standish Mellon plans to add a core-plus portfolio manager as well.
* Chris Testa and Adam Policastro were recruited from Goldman Sachs Asset Management, New York, and J.P. Morgan Securities, New York, respectively, to lead the corporate bond department at Drake Management, New York, a new firm started in October by former employees of BlackRock Inc., New York.
* Martha Strom was rehired after a five-year absence by Loomis Sayles & Co. Inc. as vice president and portfolio manager in the core bond group, a new position. She had been a municipal bond analyst for the Boston-based company.
* Tom Seay was promoted to head of fixed income, a new position, at Victory Capital Management Inc., Cleveland. He oversees $35 billion in fixed-income assets.
Driven by market
Jacob Navon, managing director of executive search firm Warren International Inc., estimated he has worked on six fixed-income searches in 2001, compared with only one or two for 1999 and 2000 combined.
Ms. Marcus also reported an increase, but declined to release actual numbers.
The hiring spree is "driven by what has happened in the equities market," Mr. Navon said, adding, "asset management firms are waking up to the fact maybe ... they need a steady mix of stocks and bonds ... I do believe people have learned their lesson." He added he has noticed the largest managers are attempting to increase their fields of expertise in all asset classes.
Investors allowed fixed income to become an asset class of lesser importance during periods of strong equity returns in the 1990s, but "from an asset allocation perspective, people are beginning to realize you cannot correct on the fly," Mr. Navon said. Investors who did not have a sufficient exposure to fixed income in 2000 and 2001 could have undone the stock gains they made in 1998 and 1999 in a six-month period, he said.
As money managers start to re-explore the fixed-income territory, they are finding they need new tools.
"In order to be truly effective, the skill level of any investment professional is broadening," Ms. Marcus said. Money management firms are looking for senior-level investment professionals who also understand marketing, global distribution skills and effective leadership of fellow employees. Ms. Marcus said these skills distinguish candidates as they are not as readily available as technical skills.
Emphasis on global
More than half of the searches she's working on - she declined to specify how many that is - are for global heads of fixed income, she said.
Mr. Navon said there will be competition among the largest managers in creation of global product lines in all asset classes, including fixed income. He pointed to Allianz as an example of a burgeoning major player. The company owns Pacific Investment Management Co., a leading manager of fixed-income assets, and other subsidiaries that could make it a "global player," said Mr. Navon. He declined to comment further.
Mr. Lannamann, head of the investment management practice at executive search firm Russell Reynolds Associates Inc., New York, also has seen demand for fixed-income money management professionals increase. He said the "couple dozen" fixed-income placements the firm did in 2001 represent a 60% increase from 2000.
Some firms are looking for investment professionals with management and marketing skills, while others are looking for people who can enhance the firm's knowledge of the various fixed-income styles.
Mr. Lannamann pointed out fixed income is now in a rare period of outperforming equities, so customers are more interested in the asset class.