Money management firms surveyed by Pensions & Investments have increased the number of their portfolio managers and research analysts to above pre-financial crisis levels, as firms make up for staffing cuts made during the market turmoil of 2008 and early 2009.
Money management firms in P&I's universe reported employing 14,182 portfolio managers as of Dec. 31, up 11% from the previous year and nearly 9% higher than Dec. 31, 2007. Research analyst positions totaled 12,635 as of Dec. 31, up 4% from a year earlier and 1.7% higher than the end of 2007.
In contrast, the P&I universe showed a 2% drop in portfolio managers between 2007 and 2008 and a 2.5% decline in research analysts during the same time period. Kevin Kozlowski, product manager for equities at Greenwich Associates in Stamford, Conn., said his analysis shows that some investment management companies “cut too far” as a result of the market crisis and are now in the process of staffing up.
“A lot of this is dictated by what's going on in the market,” he said.
He said the overall drop in portfolio managers and analysts in 2008 correlates to the drop in assets under management. According to P&I data, money managers' total worldwide institutional assets under management in 2008 plunged 21% but rebounded 19% in 2009 to $25.5 trillion.
“The first thing they turn to is portfolio managers and analysts (when overhead declines),” he said.
Mr. Kozlowski said Greenwich data show relatively no change on the staffing level of U.S. equity portfolio managers from a year ago; however, managers with more than $20 billion in assets under management have reduced their U.S. equity portfolio manager teams, on average, from 25.5 managers in early 2009 to 17.9 managers in early 2010.
Overall, however, investment managers increased their U.S. equities teams to 9.2 portfolio managers in 2010from 8.8 in 2009.
Mr. Kozlowski said that analyst positions increased slightly on average from 10.7 in 2009 to 11.3 in 2010, while portfolio managers, on average, stayed flat at 10.