Business

Hedge Fund Distribution Hiring Strengthened By Market Volatility

Hedge Fund Distribution Hiring Strengthened By Market Volatility by Context Jensen Partners

Private Equity Distribution – Hiring Trends 2015

Despite continued market volatility, we have seen no let down in capital raising hiring in 2016, with over 80 marketing moves tracked in January of this year.

  • 838 alternatives marketing moves in 2015, a significant increase from 2014.
  • Hedge Funds showed particularly strong hiring in 2015 up until the fourth quarter.
  • Private Equity firms increased their hiring in the fourth quarter and have continued this trend through January 2016.
  • A revolving door between major wirehouses and the alternatives space remains open, with a significant percentage of the senior moves we’ve tracked moving into and out of positions at investment banks.

Hedge Fund Distribution

Hedge Fund Distribution – Hiring Trends By Strategy 2015

Looking more granularly at distribution hiring at hedge funds by strategy, performance does not always predict whether a particular strategy remains attractive to marketing professionals.

  • Despite the negative performance of most strategies in the second half of last year, firms have in fact increased marketing hires in an effort to provide improved client service and retain assets under management despite overall fund under-performance.
    – Multi-Strat and Global Macro, two strategies with strong performance in 2015, saw the most significant outflow of talent over the past year.
    – Equity strategies still represent the most volume of movement in the market, unsurprising given the overwhelming number of firms employing this strategy.
    – The biggest story, both in hiring and in general, is in Credit, with both public and private debt attracting significant new talent, particularly during the middle of 2015.
  • Another key reason behind the strong hiring numbers in 2015 is a trend among smaller funds to institutionalize their marketing platforms across key investor segments.
    – Interest in specialists in marketing to Private Wealth Platforms, RIAs consultants  has been particularly strong.
Hedge Fund Distribution
Hedge Fund Distribution

Compared with 2015, Q1 2016 has seen significant outflow of distribution professionals in most strategies across the board.

Hedge Fund Distribution
Hedge Fund Distribution

Private Equity Distribution – Hiring Trends 2015

While early 2015 was slower in terms of Private Equity distribution hiring, demand for Private Equity and Real Assets marketers witnessed a strong uptick in Q3 and Q4 2015. We’ve seen significant distribution hiring for Private Debt and Private Equity Funds of Funds platforms over the past year, which we believe is only the start of key platform building initiatives.

Private Equity capital raising professionals tend to come from more diverse backgrounds compared to the previous employment of Hedge Fund marketers. The chart below shows the sources of PE marketing hires in 2015.

Hedge Fund Distribution

Q1 2016 has seen a 47% YoY increase in distribution movement within Private Equity over Q1 2015.

Unlike Hedge Funds, most of the movement within Private Equity represented professionals joining the field or moving within it, reflecting the relative stability of the Private Equity fundraising sector.

Hedge Fund Distribution

Hedge Fund Distribution

Marketing Moves – Highlights: Q4 2016 & Q1 2016

As part of our Marketing Moves(TM) tracking, we follow the key distribution professionals in the industry as they grow within the market.

  • Rex Chung, formerly a Hong Kong-based Managing Director at KKR, left in April 2016 to join EIG Global Partners, a Private Equity and Debt investor focused on Energy, as Managing Director.
  • AQR has named a new Co-Head of its U.S. Portfolio Solutions Group in April. Peter Hecht joined as Managing Director in Chicago and will work with Daniel Villalon, previously the group’s sole lead. AQR’s build out of its Portfolio Solutions Group follows a growing trend towards more consultative client service approach.
  • Gareth Henry joined Angelo, Gordon & Co as Managing Director and Global Head of Investor Relations, officially announced in January 2016. He previously served as Global Head of Investor Relations at Fortress Investment Group. Fortress has since restructured its Investor Relations platform, with no one person taking on Gareth Henry’s former position in full.
  • Garrett Berg left BlueCrest concurrently with the firm’s transformation into a family office in early December. He has joined Hoplite Capital Management as Head of Business Development and Investor Relations.

Sample Of Current Mandates

  • A $15 billion Growth Markets Private Equity firm seeking to expand its distribution platform in the US, Europe and Asia.
  • A $10 billion New York-based Credit Hedge Fund, looking to place a Global Head of Marketing.
  • A $300 million Managed Futures Hedge Fund seeking a Head of Investor Relations in Texas.
  • A $5 billion Private Equity firm seeking a senior fundraising professional out of London.
  • A $5 billion Real Estate firm looking for two senior institutional and retail marketing professionals in the U.S.
  • A major Private Fund Group seeking senior fundraising professionals in the US, considering a full team carve-out.

If you are a candidate interested in discussing these mandates further, please reach out to our offices: 212-457-0062.