NEW YORK — Senior asset and wealth management professionals required an average 20% to 25% increase in total compensation to lure them to new companies in 2006, roughly twice the increase needed two years ago, according to Russell Reynolds Associates' annual report on industry recruiting trends. Jeff Garrity, managing director and head of the Russell Reynolds' Americas Asset and Wealth Management practice, said in an interview that the convergence of traditional and alternative investment houses and the growing importance of back-office managerial muscle helped drive demand for talent during the year.
More firms are focusing on creating long-term value while enhancing short-term earnings, with top performers snaring a larger share of bonus pools, Mr. Garrity said. Money management executives are becoming much more scientific in setting up metrics for portfolio managers to meet, and those managers that can deliver over the long term are being rewarded, he said.
Demand this year remained brisk for CIOs who can structure portfolios for bigger endowments and foundations, and such demand should continue in the coming year, the report said.
Mr. Garrity also said the flow of top investment talent from long-only firms to alternative firms such as hedge funds showed signs of balancing in 2006, as long-only firms tweaked the compensation structures or established their own alternative product lines.
The only asset class that saw a decline in recruiting activity was traditional core and core-plus bond managers, down roughly 15% from last year.