Recruiters pointed to several high-profile moves by institutional marketers to the hedge fund space that simply fell apart.
Don Steinbrugge moved in 2002 from head of institutional marketing at Merrill Lynch Investment Managers, Princeton, N.J., to $7 billion hedge fund manager Andor Capital Management LLC, New York. Mr. Steinbrugge left less than a year later. Neither Andor nor Mr. Steinbrugge were specific about the reasons for his departure in press reports at the time.
Another person who moved from the traditional asset management world to hedge funds and left fairly quickly was Sharon Haugh. She joined $6.5 billion Pequot Capital Management Inc., Westport, Conn., as its chief executive officer in February 2003. She had been chairman of Schroder Investment Management North America, New York, after starting there as an institutional marketer. In fact, Ms. Haugh was awarded the Richard A. Lothrop award for outstanding achievement as a marketer by the Association of Investment Management Sales Executives in 2002 before she left Schroder Ms. Haugh left Pequot last month "by mutual agreement," said Jonathan Gasthalter, a Pequot spokesman. He declined to comment further on the reasons behind Ms. Haugh's departure. Art Samberg, Pequot's chairman and founder, has assumed Ms. Haugh's responsibilities and Ms. Haugh will not be replaced as CEO, said Mr. Gasthalter.
Ms. Haugh was unable to return a call placed to her home by press time seeking information about her departure and her plans.
Another big problem with seeking good marketing talent is that nearly all hedge funds and fund of funds have a finite asset-gathering period, said Mr. Martinolich. "The problem is a function of the bifurcation of the hedge fund industry. A marketer is hired to raise new assets, but what happens when there's no more room for new assets?" he said.
Mr. Martinolich said hedge fund managers are only now just beginning to understand that they need to transform talented marketers into skilled client service staff and relationship managers and pay them accordingly. But most really good marketers probably wouldn't want a client service job, anyway. "The good guys are not going to want to spend more than 50% of their time doing client service, if that," he said.
The trick is to switch marketers to a compensation deal that grants an equity stake in the company and probably part of the revenue stream, Mr. Martinolich said. "The premise is that if you, as a hedge fund company, don't know how to compensate your marketers after your doors close, you're only going to attract average marketers," especially for firms with less than $2 billion in assets under management, Mr. Martinolich said.