Talent and
Compensation Trends
in Asset Management
Distribution
Mid-Year Review August 2013
Laurie Thompson
Chad Astmann
Paul Charles
Charlie Kershaw
Steven McCrindle
Heidrick & Struggles 1
Contents
Introduction3
Key Findings 4
Part One – Summary Broad General Trends across Traditional, Multi-Product, Hedge Funds, Placement Agents and Private Equity Firms
5
Profile of the Talent Pool 6
Capital Raising and Retention 9
Compensation12
General Team Structure
14
The Product Specialist Role 15
Beyond Capital Raising and Retention – Measuring Performance 15
Global Hiring Environment and Strategies – Expanding Beyond the United States
16
Part Two – Focus on Firm Types
Traditional Asset Managers – Independent
19
21
Traditional Asset Managers – Bank-Owned33
Multi-Product Asset Manager – Independent46
Multi-Product Asset Manager – Bank-Owned 58
Hedge Funds
70
Private Equity
83
Real Estate 96
Placement Agents 108
Part Three – Compensation
Base Salary 119
123
Bonus131
Do MBAs earn more?
139
Characteristics of an Outstanding Distribution Professional
141
Emerging Trends for 2014 and Beyond 142
Topics for Further Exploration 143
Study Methodology
144
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 2
Introduction
While market conditions have stabilized since our last look at alternatives
asset management distribution in 2009, the fundraising environment remains
exceptionally competitive. In addition, several trends have emerged that
are increasing the complexity of capital raising and retention while opening
windows of opportunity for those firms best positioned to capture market share.
These trends include the convergence of alternatives and traditional investing,
increased attention to the high-net-worth client segment and markedly higher
investor expectations regarding fees, transparency, risk and communication. The
challenges and opportunities presented by these trends inspired us to publish a
follow-on paper and to expand it across the broader asset management industry
to include hedge funds, traditional asset managers, real estate, private equity
and placement agents.
As asset management firms evolve—reshaping their business models,
redefining their investment strategies and creating stronger leadership and
succession plans—distribution talent within them is evolving as well. The
distribution professionals at the front lines are increasingly diverse, frequently in
transition and under great pressure to perform at what seems like a higher level
every year.
What motivates and inspires them? What characteristics set the outstanding
ones apart from the pack? How important is technical depth vs. relationships?
How are different firms addressing client coverage needs? How are they thinking
about handling overseas investors? Can firms leverage their existing sales force
to market new types of products? How are firms sourcing, attracting, evaluating,
compensating and retaining talent? What topics are front of mind for 2014 and
beyond?
A significant focus of Heidrick & Struggles’ work in recent years has been guiding
clients through these dynamics and helping them recruit, retain and structure
their distribution teams in the best way possible. In this paper we will share the
perspectives and insights we have gained from these experiences. We will also
be sharing the results of a recent survey we conducted of sales, investor relations
and client services professionals from across the asset management industry. For
the sake of simplicity, we will refer to people working in all of these job functions
as “distribution professionals” throughout the paper.
Heidrick & Struggles 3
Key Findings
• Distinctions between alternatives, traditional and multi-product asset management firms
are increasingly blurred.
• Nearly 41% of respondents said their firms are actively recruiting or opportunistically
meeting with potential candidates to fill distribution roles.
• About 21% of respondents in the United States said their firms are recruiting distribution
professionals for UK/Europe, 24% for Asia and 11% for the Middle East.
• The majority of distribution professionals (about 57%) are not actively looking but are open
to considering new opportunities if presented.
• Respondents said the most compelling reasons for changing firms are (in order) the
opportunity to build the sales/marketing effort, firm culture, compensation and people.
This has strong implications for talent retention.
• There has been a considerable amount of movement within the past three years, with 50%
of respondents indicating they changed jobs during that period.
• When changing jobs, 14% of respondents reported receiving “make whole” bonuses, 28%
received a sign-on bonus and nearly 39% were given a minimum guaranteed bonus “floor.”
• Respondents are cautiously optimistic about bonuses for 2013; 55% expect an increase
compared to 2012 while 20.5% said it was still too early in the year to tell.
• There is a disconnect between the way most firms compensate distribution professionals
(purely discretionary) and the way most distribution professionals prefer to be
compensated (hybrid formula/discretionary).
• About 45% of respondents hold MBA degrees. We found that having an MBA tends to
increase base salary but the impact on bonuses is less clear.
• Beyond capital raising and retention, the top-ranked performance metric is teamwork and
collaboration across the firm.
• 17.4% of respondents hold the CFA designation—an increasingly valuable differentiator.
• 61% of respondents said capital raising is more difficult than three years ago and 48% said
capital retention is more difficult than three years ago.
• Nearly two-thirds of capital inflows came from new investors and one-third from existing
investors in 2012.
• The perceived level of difficulty for raising and retaining capital is quite high, but the
median amount of capital raised per marketer is trending positively for 2013 compared to
2012 across almost all firm types.
• There is notable variability among distribution professionals within different firm types
about many of the topics we explored
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 4
Part One – Summary
Broad General Trends across
Traditional, Multi-Product,
Hedge Funds, Placement Agents
and Private Equity Firms
Contents
Profile of the Talent Pool 6
Capital Raising and Retention 9
Compensation
12
General Team Structure
14
The Product Specialist Role 15
Beyond Capital Raising and Retention – Measuring Performance 15
Global Hiring Environment and Strategies – Expanding Beyond the United States
16
Part One – Summary
The population of distribution professionals is quite diverse, increasingly sophisticated around products and frequently
on the move.
Academics:
Historically, the majority of professionals grew up on the sell side or in classic sales roles; today professionals are also
entering the business directly from undergraduate or graduate programs or transitioning in from investment roles.
Increasingly, the CFA has become an important differentiation, with 17.42% of respondents holding this certification. In
addition, 44.92% of respondents hold MBAs and 11.59% hold a Master’s degree.
What is the highest level of education you have completed?
Answer Options
Bachelor’s Degree
Response Percent
Response Count
41.1%
202
Master’s Degree (non MBA)
11.6%
57
MBA
44.9%
221
Ph.D.
2.4%
answered question
12
492
Certifications:
Do you hold any certifications?
Answer Options
Response Percent
Response Count
17.4%
77
CAIA
6.1%
27
CPA
1.8%
8
Series 3
22.4%
99
Series 6
12.2%
54
Series 7
72.2%
319
Series 24
19.9%
88
CFA
Series 31
3.8%
17
Series 63
62.0%
274
Series 65
17.0%
75
No other certifications
10.9%
48
Other (please specify)
51
answered question
442
Other certifications cited were series 66, CIMA and CPA
Movement:
At Heidrick & Struggles, we value stability and tenure in the professionals we recruit. That may sound like a curious
statement coming from executive recruiters who are often brought in to effect change, but our clients look for such
demonstrations of loyalty and therefore we do as well. In our view, the frequency of job moves during recent years has
presented hiring managers with a real challenge. Beyond questions about culture fit that frequent moves raise, it has
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 6
Summary
Profile of the Talent Pool
that candidates often are not in their seats long enough to build momentum within an institutional sales cycle that
typically takes one to four years.
How pervasive is this trend and what is driving this frequency of moves?
Interestingly, 50.1% of survey respondents reported changing jobs during the past three years.
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
50.1%
190
No
49.9%
189
answered question
379
When considering their motivation, we were surprised to see that while compensation remained an important driver of
job changes, more than one-quarter of respondents who had made a move within the past three years reported their
compensation remained flat from firm to firm, and very few ranked compensation as the number one driver in making
the move.
If yes, by what percentage did your total compensation change?
Answer Options
Remained Flat
Increased by 1% - 9%
Response Percent
Response Count
26.7%
56
7.1%
15
14.8%
31
Increased by 20% - 29%
15.7%
33
Increased by 30% - 39%
10.0%
21
Increased by 40%+
8.1%
17
Decreased by 1% - 9%
1.0%
2
Decreased by 10% - 19%
3.8%
8
Decreased by 20% - 29%
3.3%
7
Decreased by 30% - 39%
3.8%
8
Decreased by 40%+
5.7%
12
Increased by 10% - 19%
answered question
210
We often advise clients that minimum floors or “make-whole” bonuses are required to attract the strongest talent—a
particularly relevant topic moving into the second half of the year. When changing jobs within the past three years,
14% of individuals reported receiving a “make-whole” bonus and 38.7% were offered a minimum bonus floor
Heidrick & Struggles 7
Summary
also become increasingly difficult to assess performance and effectiveness, particularly around capital raising, given
Answer Options
Response Percent
Response Count
Sign-on bonus
28.0%
52
Buy out of equity
11.3%
21
Make whole bonus (100% of anticipated bonus at previous firm)
14.0%
26
Minimum bonus floor (% of anticipated bonus at previous firm)
38.7%
72
Not applicable
37.1%
69
Other (please specify)
11
answered question
186
Beyond compensation, what motivates a distribution professional to consider a new
opportunity?
We asked survey participants to rank reasons for changing firms in order of importance. The top four drivers (based on
an average ranking) were:
1. Opportunity to grow and build the marketing effort
2. Firm culture
3. Compensation
4. People
If you changed firms in the past 3 years, please rank your primary motivation(s) for
change:
Answered: 187
6.67
Management opportunity
Compensation
8.96
Firm Culture
9.07
6.93
Brand
8.57
Marketability of products
Layoffs or restructuring
6.99
Ability to have influence outside of
fundraising
6.94
7.20
Level of value placed on marketing
8.84
People
Opportunity to grow/build the
marketing effort
Greater opportunities for advancement
Firm's willingness to meet client
expectataions
9.45
8.09
5.96
In our experience, most candidates are not actively looking to make a change but are open to our outreach calls. This
view is supported by feedback from survey respondents, with the majority (56.8%) characterizing their current state of
mind as not actively looking but open to considering new opportunities.
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 8
Summary
If you changed firms, were you offered a (check all that apply):
respondents we realized they made up more than one-fifth (22.6%) of the population.
These numbers are extraordinarily high for a group of professionals who already experienced high levels of movement
between 2009–2012, and raise interesting challenges for managers regarding retention.
How would you characterize your current state of mind?
Answer Options
Actively looking (unemployed)
Response Percent
Response Count
4.8%
17
Actively looking (currently employed)
17.8%
63
Not looking but open to considering new opportunities if presented
56.8%
201
Not open to considering new opportunities
20.6%
73
Other (please specify)
9
answered question
354
Capital Raising & Retention
There is clear consensus that raising and retaining capital has become increasingly competitive among asset
management firms due to the broader economic climate as well as challenges unique to the industry. Clients have
higher expectations than ever, and even the most “institutionalized” asset managers have had to raise their game to
keep pace.
We found that 61.5% of respondents think capital raising is more difficult than three years ago, 17.5% think it is about
the same and 20.9% think it is easier. Nearly half (48.5%) said retention of capital is more difficult than three years ago,
40.7% said about the same and just 10.7% said it is easier.
What is your view on the level of difficulty in raising capital today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Slightly more difficult
8.8%
33
Moderately more difficult
23.3%
88
Significantly more difficult
29.4%
111
About the same
17.5%
66
Moderately easier
17.5%
66
Significantly easier
3.4%
13
Other (please specify)
answered question
7
377
Heidrick & Struggles 9
Summary
Looking at those who described themselves as “actively looking,” when we combined employed and unemployed
Answer Options
Response Percent
Response Count
Slightly more difficult
12.3%
46
Moderately more difficult
23.1%
86
Significantly more difficult
13.1%
49
About the same
40.8%
152
Moderately easier
9.7%
36
Significantly easier
1.1%
4
Other (please specify)
6
azznswered question
373
Percentage of inflows from new vs. existing investors
On average, respondents reported approximately two-thirds of capital coming from new investors and one-third
coming from existing investors in 2012.
% Inflows from New
Investors
% Inflows from Existing
Investors
Hedge Fund
59.70
40.30
Multi-product Asset Managers Bank Owned
63.42
36.58
Multi-product Asset Managers Independent
71.12
28.88
Private Equity
59.55
40.45
Real Estate
75.89
24.11
Firm Type
Traditional Asset Management Bank-Owned
70.00
30.00
Traditional Asset Management Independent
65.15
34.85
Summary Average
65.48
34.52
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 10
Summary
What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?
firm types, assets under management, strategies and experience levels, which may warrant deeper exploration. We
were surprised by comparatively strong capital-raising levels YTD 2013 vs. 2012, especially given the high level of
perceived difficulty and the fact that we are only halfway through the year.
Capital raising levels per marketer (as of June 7, 2013)
Firm Type
Year
Mean
Median
Range
# of
marketers
that raised
zero capital
% of
marketers
that raised
zero capital
Hedge Fund
2012
302,525,000
100,000,000
0 - 5,000,000,000
12/61
19.67%
Hedge Fund
2013
315,546,875
150,000,000
0 - 2,000,000,000
9/64
14.06%
Traditional
Asset Manager Independent
2012
466,857,142
180,000,000
0 - 3,300,000,000
8/35
22.08%
Traditional
Asset Manager Independent
2013
771,478,947
190,000,000
04,000,000,000
4/40
10.00%
Traditional Asset
Manager - BankOwned
2012
805,538,461
270,000,000
0 - 3,000,000,000
2/15
13.33%
Traditional Asset
Manager - BankOwned
2013
1,061,785,714
320,000,000
0 - 5,000,000,000
2/14
14.28%
Multi-Product
Asset Manager Independent
2012
459,826,923
250,000,000
0 - 3,000,000,000
5/52
9.61%
Multi-Product
Asset Manager Independent
2013
1,167,061,403
300,000,000
0 - 5,000,000,000
6/58
10.34%
Multi-Product
Asset Manager Bank Owned
2012
400,285,714
250,000,000
0 - 2,000,000,000
2/28
7.14%
Multi-Product
Asset Manager Bank Owned
2013
331,678,571
115,000,000
0 - 1,500,000,000
4/29
13.79%
Minus 1 outlier
citing $5bln
Private Equity
2012
335,000,000
115,000,000
0 - 800,000,000
3/15
20.00%
Minus 1 outlier
citing 4bln
Private Equity
2013
725,166,666
275,000,000
0 - 5,000,000,000
5/18
27.77%
Four marketers
up over $1bln
Real Estate
2012
131,166,666
100,000,000
0 - 522,000,000
4/12
33.33%
Real Estate
2013
177,318,181
162,500,000
0 - 650,000,000
3/11
27.27%
Placement
Agents
2012
358,571,429
105,000,000
0 - 2,000,000,000
2/15
13.33%
Placement
Agents
2013
494,000,000
500,000,000
0 - 1,000,000,000
1/16
6.25%
Notes
Minus 2 outliers
at $8bln and
$10bln for 2013
YTD
Minus 5 outliers
citing $6bln,
$7bln, $8bln,
$10bln and
$12bln
Heidrick & Struggles 11
Summary
We also looked at capital raised per individual in 2012 and YTD 2013 and found a broad range of experiences across
Compensation
following insights:
Distribution professionals are cautiously optimistic about their bonus expectations for 2013, with 55% expecting an
increase, 20.5% saying it’s too early in the year to speculate and 6.9% expecting a decrease.
What are your bonus expectations for 2013 compared to 2012?
Answer Options
Response Percent
Response Count
Increased by less than 10%
10.5%
37
Increased by 11% - 15%
10.0%
35
Increased by 16% - 20%
8.3%
29
Increased by 21% - 25%
9.1%
32
Increased by 26% - 30%
3.1%
11
Increased by 31% - 35%
2.6%
9
Increased by 36% - 40%
6.3%
22
Increased by greater than 40%
5.1%
18
Flat from my 2012 bonus
17.7%
62
Decreased by less than 10%
2.0%
7
Decreased by 11% - 15%
0.3%
1
Decreased by 16% - 20%
0.9%
3
Decreased by 21% - 25%
0.3%
1
Decreased by 26% - 30%
0.6%
2
Decreased by 31% - 35%
1.1%
4
Decreased by 36% - 40%
0.3%
1
Decreased by greater than 40%
1.4%
5
Still too early in the year to estimate
20.5%
72
Other (please specify)
17
answered question
351
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 12
Summary
Broadly speaking, when looking at compensation across all levels, firm types and functions, we uncovered the
deferred in 2012 while 31.1% had more than 10% of their cash bonus deferred.
What percentage of your cash bonus was deferred in 2012?
Answer Options
Response Percent
Response Count
67.8%
236
Less than 10%
10% - $19%
8.3%
29
20% - 29%
13.8%
48
30% - 39%
4.0%
14
40% - 49%
1.1%
4
50% - 60%
3.2%
11
60% - 70%
1.1%
4
70%+
0.6%
answered question
2
348
We also looked at other components to a compensation package beyond cash, and found a high percentage of
distribution professionals are offered equity or equity-like participation.
What other components comprise your total compensation (check all that apply)?
Answer Options
Response Percent
Response Count
Stock options
30.5%
60
Participation in the funds
27.4%
54
Equity-like participation
45.7%
90
Sign on bonus
13.7%
27
Retention bonus
10.7%
21
Other (please specify)
25
answered question
197
Some of the “other” incentives respondents were offered include long-term compensation, profit sharing, commissions
and benefits such as 401(k) contributions.
For fundraising professionals, the debate over formulaic vs. discretionary bonuses continues. Anecdotal evidence
tells us that pure formulas are less common every year, and this view is supported by the survey data. Only 11% of
respondents are paid purely by formula and 44% are paid on a purely discretionary basis. The remainder receive
bonuses based on a hybrid model, often with a strong metrics component.
Which option best characterizes your current bonus structure?
Answer Options
Response Percent
Response Count
Purely formulaic
11.0%
39
Loosely formulaic driven by metrics
12.7%
45
Purely Discretionary
44.4%
157
Part formula / part discretionary
31.9%
113
Other (please specify)
answered question
6
354
Heidrick & Struggles 13
Summary
When looking at deferred compensation, we found that 67.82% of respondents had less than 10% of their cash bonus
only 12.7% preferred a purely discretionary bonus structure. In our experience, a discretionary model provides firms
and hiring managers very useful control over managing compensation, particularly in volatile markets, and helps
support the cultivation of a collaborative team culture. But the disparity between the number of individuals being
paid on a purely discretionary basis (44%) and the number who actually prefer it (12.7%) raises a potentially interesting
opportunity for hiring firms looking to differentiate their compensation structure in order to attract and retain top
talent.
Which bonus structure do you prefer?
Answer Options
Response Percent
Response Count
Purely formulaic
16.6%
59
Loosely formulaic driven by metrics
15.5%
55
Purely Discretionary
12.7%
45
Part formula / part discretionary
49.0%
174
Agnostic
6.2%
22
Other (please specify)
7
answered question
355
General Team Structure
Looking across the full spectrum of asset management firms, we compiled the average and median numbers of
professionals allocated to different job functions and looked at how teams are aligned.
Mean
Median
Range
# of sales/fundraising professionals
10.8
5
1 - 100
# of product specialists
8.4
4
1 - 100
# of client-facing investor relations professionals
5.9
3
0 - 100
# of non–client-facing client services
professionals
9.83
4
0 - 320
Answer Options
Response Percent
Response Count
Geographically
50.3%
186
Client Channel
20.0%
74
Product
1.9%
7
No formal alignment
27.8%
103
1
1. For firms employing product specialists
We also considered how teams are aligned.
How is coverage among your current sales team (primarily) aligned?
Other (please specify)
28
answered question
370
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 14
Summary
Just about half (49%) of respondents reported a preference for the part formula/part discretionary hybrid model and
The Product Specialist Role
become an increasingly important function as traditional and alternative investment strategies continue to converge
and clients demand more sophisticated product expertise. Most respondents view the role as either highly successful
or moderately successful within their firms, although many took a neutral position, noting the recent establishment
of the role within their firms and saying, in effect, it is still too early to judge its success. Some mentioned avoiding
the sales vs. investment team debate altogether by having product specialists report to product development, client
services or an unaffiliated managing principal. Several said their firms are in the process of hiring and integrating
product specialists for the first time this year.
Where do product specialists at your firm report to?
Answer Options
Response Percent
Response Count
Investment team
26.3%
94
Sales team
20.7%
74
Dual reporting to investment and sales teams
10.9%
39
Not applicable - my firm does not employ product specialists
42.2%
151
Other (please specify)
20
answered question
358
How successful has the product specialist been within your current firm?
Answered: 367
17%
Highly successful
26%
Moderately successful
13%
Neutral
Not very successful
Not at all successful
N/A - my firm does not
employ product specialists
3%
1%
41%
Beyond Capital Raising and Retention – Measuring
Performance
We are often asked which metrics are employed when measuring the success of fundraising and client services
professionals. In our study, we found that the most frequently cited metric by far is teamwork and collaboration
with distribution colleagues, the investment and middle office teams, and senior management. The challenge with
quantifying collaboration, of course, is that it’s so subjective. To put it bluntly, even those professionals with the
sharpest elbows will define themselves as collaborative. Heidrick & Struggles evaluates this characteristic in candidates
through formal and informal referencing, a confidential exercise that often spans several stages in a candidate’s
career and that never results in direct feedback. (One area we would like to explore further in future research is
how firms define and evaluate collaboration and team orientation internally and whether that information is being
communicated.)
Heidrick & Struggles 15
Summary
In our client work, we have seen a high level of debate around the product specialist role. The product specialist has
etc.) as an important metric for measuring performance. Quite a few mentioned firm-building involvement in areas
such as product development, brand awareness, mentorship and recruiting: in essence, what is the distribution
professional’s strategic value to the firm beyond capital raising and retention? Client feedback and overall firm
performance were also cited as performance metrics.
Global Hiring Environment and Strategies –
Expanding Outside the United States
In addition to deeper penetration within the United States market, asset management firms are increasingly looking
beyond their U.S. investor base for potential sources of capital. While the U.S. remains the most active recruiting
market for distribution professionals, a good number of the firms we surveyed reported either actively recruiting or
opportunistically meeting with potential candidates in the UK/Europe, Asia and the Middle East. And while 5.2% of
respondents reported a reduction in the size of their U.S. teams, projected reductions outside the U.S. are much lower,
ranging from 0.7% in the Middle East to 2.9% in UK/Europe through the remainder of 2013.
US: How would you best characterize your current firm’s hiring plans within *US* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
15.0%
52
Opportunistically meeting potential candidates
25.9%
90
Team will remain flat through year-end
53.9%
187
Currently reducing the size of the team
5.2%
18
Other (please specify)
5
answered question
347
Asia: How would you best characterize your current firm's hiring plans within *Asia* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
7.6%
24
Opportunistically meeting potential candidates
16.5%
52
Team will remain flat through year-end
25.9%
82
Currently reducing the size of the team
1.9%
6
No current presence or plans to expand in to Asia
48.1%
152
answered question
316
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 16
Summary
Many respondents cited activity (number of calls and meetings, consultant approval ratings, number of final meetings
Answer Options
Response Percent
Response Count
Currently actively recruiting
7.3%
23
Opportunistically meeting potential candidates
13.7%
43
Team will remain flat through year-end
35.5%
111
Currently reducing the size of the team
2.9%
9
No current presence or plans to expand in the UK or Europe
40.6%
127
Other (please specify)
1
answered question
314
Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
1.6%
5
Opportunistically meeting potential candidates
9.8%
30
Team will remain flat through year-end
23.3%
71
Currently actively recruiting
Currently reducing the size of the team
0.7%
2
No current presence or plans to expand in the Middle East
64.6%
197
Other (please specify)
5
answered question
305
In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?
Answer Options
Response Percent
Response Count
Exporting an existing team member overseas
15.9%
52
Hiring an outside candidate within the local region
58.5%
192
Cover the region from the US
8.2%
27
Not applicable: my current firm does not have a marketing presence
outside of the US
17.4%
57
Other (please specify)
16
answered question
328
How does your firm typically recruit sales & client services professionals? (Check all that apply)
Answer Options
Response Percent
Response Count
Leveraging industry network
57.7%
198
Sourcing investors
7.6%
26
LinkedIn
14.3%
49
Retained executive search
51.9%
178
Contingency executive search
24.2%
83
Professional associations
12.5%
43
Employee referrals
54.8%
188
Internal recruiting function
31.2%
107
Other (please specify)
answered question
4
343
Heidrick & Struggles 17
Summary
UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the
remainder of 2013?
not to use a local placement agent. By far, the most effective strategy cited among respondents is to hire an outside
candidate from within the local geography (58.5%).
Considerations Unique to Asia and Europe
Asia (Author: Steven McCrindle, Hong Kong)
Firms that historically had reasonable success partnering with local intermediaries and flying in and out of Asia
to pick up business have been struggling to raise and retain assets from Asian investors over the past several
years. As a result, most firms have opted to put at least one sales person on the ground in Asia to manage client/
intermediary relationships. More progressive firms have built distribution teams of four to six professionals. The
question now isn’t really “should we have someone on the ground in Asia,” it’s “how many people do we need
on the ground in Asia?”
While it’s possible to cover the 20 largest institutional investors in Asia (excluding Japan) with one senior sales
person on the ground backed up by a sales support team in the head office, for firms looking to expand beyond
the top two or three institutional investors in individual Asian markets (Korea, Singapore, Hong Kong, Taiwan,
China, etc.), it’s imperative to add local language sales/client service capability.
Firms that use placement agents/intermediaries extensively in the region still benefit from having their own
sales people on the ground in Asia to manage the process in tandem with intermediaries where it makes
the most sense (e.g., Japanese corporate pension funds) and go direct where there’s little benefit in using an
intermediary (e.g., sovereign wealth funds). The largest distribution teams in the region take this approach.
Europe/UK (Author: Charlie Kershaw, London)
Marketing in Europe involves multiple cultural nuances, which supports the case for having staff on the ground
there. Even European hedge funds tend to organize their teams by sub-geography rather than channel for that
very reason.
There are very different eco-systems at work in the different markets. The UK investor base, for example, tends
to be consultant-led, and nurturing relationships with investors can be a very slow process. Scandinavia is seen
as quite advanced in the way its major investors allocate to alternatives, with a large number of direct investors
who will work actively to find the best funds for capital allocation within each strategy. Continental Europe,
however, tends to require a different approach; it is an imperfect market with many small investors and a heavier
emphasis on trust and relationships.
The major downside to adding dedicated marketing staff in Europe at present is the regulatory environment.
While some of the finer points in AIFMD are still not clear, the prevailing message is that it will greatly restrict
hedge funds from soliciting capital in Europe. Additionally, hedge funds that do have European investors will
have to become compliant with other parts of AIFMD, including compensation restrictions.
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 18
Summary
There is considerable debate about how to penetrate markets outside the U.S. most effectively when firms decide
Part Two – Focus
on Firm Types
Contents
Traditional Asset Managers – Independent
21
Traditional Asset Managers – Bank-Owned
33
Multi-Product Asset Manager – Independent
46
Multi-Product Asset Manager – Bank-Owned 58
Hedge Funds
70
Private Equity
83
Real Estate 96
Placement Agents 108
Part Two – Focus on Firm Types
In Part One of this report, we looked at a number of trends related to
distribution professionals in the asset management industry. In Part Two
we will explore these trends as they relate more specifically to different firm
types across traditional, alternatives and multi-product platforms. Given the
amount of overlap and complexity within these firm structures, we did our best
to segment them in a way that provides the most relevant insights into this
dynamic and evolving industry. We asked survey respondents how they would
best characterize their current firms, and it’s important to note that participants
self-selected their categories.
With so much convergence happening across the asset management world,
we acknowledge the difficulty of trying to categorize an industry in flux. For
example, 10.3% of respondents chose “other” to describe their firm. In some
cases, individuals from within the very same organization chose different
categories. Overall, there is a lack of standardization about how firms are
defined, and in future studies we will try to develop a more precisely defined
structure. Finally, while we did receive feedback from participants working at
hedge funds of funds, OCIOs and private equity fund of funds, the sample sizes
in those cases were too limited to include them as categories in our analysis.
How would you characterize your current firm?
Answered: 454
Traditional Asset Managers – Independent
15.2%
Traditional Asset Managers – Bank-Owned
5.9%
Multi-Product Asset Manager – Independent
22.0%
Multi-Product Asset Manager – Bank-Owned
11.5%
Hedge Funds
20.9%
Private Equity
6.4%
Hedge Fund of Funds
3.3%
Private Equity Fund of Funds
1.5%
Real Estate
5.1%
Placement Agents
5.9%
OCIO
2.2%
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 20
Traditional Asset Managers – Independent
management firms. This phenomenon has been driven by a number of factors, including mergers and acquisitions,
shifting product focus, industry consolidation and compensation dynamics.
Of 54 distribution professionals who reported working for independent traditional asset managers, well over half (57%)
changed firms in the past three years. Although compensation is not the sole motive, a substantial majority (71%)
indicated they moved to a position that offered a pay increase, with 35% indicating a healthy bump of 10%-29% and
more than 10% seeing a 30% uptick over their previous compensation total. Nearly half (46%) were offered a minimum
bonus floor and almost 30% received a sign-on bonus. We find this data to be consistent with the pick-up in hiring and
increased demand for sales talent in the independent asset management space.
When asked to rank a dozen reasons for making a change on a scale from 1 to 10, respondents ranked layoffs/
restructuring lowest and opportunity to grow/build the market as the leading reason. Participants also rated firm culture
and people as significant draws. These factors were ranked surprisingly higher than others such as marketability of
products and firm brand value, which usually rate high in our conversations with distribution professionals.
Given heavy talent movement over the past three years, an uptick in compensation and motivation for change, we
thought it would be interesting to know how distribution professionals feel about changing platforms in the future.
When asked about their current state of mind, 14% of participants indicated they were looking actively for a new role
and 58% were open to considering new options if presented. Only 28% said they were not open to new opportunities.
We concluded that while the talent war is swinging to the side of supply, organizations with a good culture and
reasonable aspirations have a good opportunity to at least engage leading talent in conversations.
The relatively low level of distribution professionals indicating an active approach to changing firms may be related to
the positive outlook on 2013 compensation. About 57% of respondents indicated an increase in compensation over
2012, with the majority expecting a moderate increase of less than 15%. A few indicated an increase above 30%, but such
cases seem to be rare. We also found that the cash compensation for more than 70% of the respondents was minimally
deferred but that nearly half (48%) received some form of stock options or equity.
When it comes to determining bonuses, we found that most compensation models have some degree of discretionary
determination; only 14% of participants said their bonuses are determined under purely formulaic structures. Notably,
36% of respondents indicated working under a purely discretionary model and 34% have a blended (discretionary/
formulaic) model. These figures are surprisingly mismatched with what distribution professionals actually want. When
asked what their preference would be on bonus structure, more than half (52%) indicated a blended compensation
structure.
In addition to capital raising and retention, respondents in this category cited team collaboration, consultant-relations
ratings and general business development activity as commonly used performance metrics. Although designing a sales
compensation model is an ongoing challenge for all asset managers, independent managers have comparatively greater
freedom and should be constantly seeking input from the sales team and executive committee regarding structure.
Our survey revealed some decidedly positive results worth mentioning, especially with regard to asset raising and asset
flows. On average, marketers are experiencing larger sales in 2013 (median of $190 million per salesperson) than in 2012
(median of $180 million raised). Notably, 65% of the flows have been coming from new investors.
We also took a look at how firms are currently structuring their distribution organizations. Respondents indicated the
average number of pure sales members within their firms is 7, product specialists 6 and client services 7. Sales teams
Heidrick & Struggles 21
Traditional Asset Managers – Independent
There has been significant movement over the past three years among distribution talent working for traditional asset
more than 50% of firms now employ product specialists and that they are evenly split between reporting to sales and
reporting to the investment teams. For the most part, the sales talent polled in this survey said product specialists are
either moderately successful (21%) or have had only minimal impact (18%) on the sales process. Several respondents
noted the newly established nature of these roles within their organization, and were taking a wait-and-see approach
to its effectiveness.
Of the respondents who provided information on their firms’ hiring plans, most seem to think their firms are active
across the globe. The region targeted for highest growth appears to be the United States, with 37% of participants
indicating their firm is either opportunistically or actively recruiting to their sales ranks there. There seems to be
moderate activity in Asia (26%) and in UK/Europe (21%), with participants indicating moderate or aggressive hiring
activity and planning. The Middle East seems the most stagnant with nearly 80% of participants indicating no plans for
hiring in the region. When asked how to cover a new region most effectively, most respondents (58%) indicated that
hiring external talent from within the region is the most effective approach.
Lastly, the survey participants were in clear agreement that a good recruitment strategy includes a healthy
combination of approaches. When asked how their firm typically finds talent, more than 60% said the firm calls on a
retained search firm, 51% said employee referrals and 43% said the firm’s own industry network. Consistent with these
findings, more than 60% of our respondents indicated that their organization had hired a retained search firm in the
past two years to find distribution talent.
What is the highest level of education you have completed
Answer Options
Response Percent
Response Count
Bachelor's Degree
46.4%
32
Master's Degree (non MBA)
4.3%
3
MBA
49.3%
34
Ph.D.
0.0%
0
answered question
69
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
57.4%
31
No
42.6%
answered question
23
54
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 22
Traditional Asset Managers – Independent
are organized predominantly along geographic lines (60%) rather than client channels (17%). Notably, we found that
Answer Options
Response Percent
Response Count
16.1%
5
Increased by 1% - 9%
9.7%
3
Increased by 10% - 19%
22.6%
7
Increased by 20% - 29%
12.9%
4
Increased by 30% - 39%
6.5%
2
Increased by 40%+
3.2%
1
Decreased by 1% - 9%
0.0%
0
Decreased by 10% - 19%
6.5%
2
Decreased by 20% - 29%
3.2%
1
Decreased by 30% - 39%
9.7%
3
Decreased by 40%+
9.7%
3
Remained Flat
answered question
31
If you changed firms, were you offered a (check all that apply):
Answer Options
Response Percent
Response Count
Sign-on bonus
28.6%
10
Buy out of equity
8.6%
3
Make whole bonus (100% of anticipated bonus at previous firm)
11.4%
4
Minimum bonus floor (% of anticipated bonus at previous firm)
45.7%
16
Not applicable
31.4%
11
Other (please specify)
2
answered question
35
If you changed firms in the past 3 years, please rank your primary motivation(s) for
change:
Answered: 41
7.51
Management opportunity
9.05
Compensation
9.23
Firm Culture
Brand
7.00
8.26
Marketability of products
Layoffs or restructuring
Ability to have influence outside of
fundraising
Level of value placed on marketing
6.22
6.89
7.18
8.51
People
Opportunity to grow/build the
marketing effort
Greater opportunities for advancement
Firm's willingness to meet client
expectataions
9.66
7.50
6.33
Heidrick & Struggles 23
Traditional Asset Managers – Independent
If you changed firms within the past 3 years, by what percentage did your total compensation change?
Answer Options
Response Percent
Response Count
0.0%
0
Actively looking (unemployed)
Actively looking (currently employed)
14.0%
7
Not looking but open to considering new opportunities if presented
58.0%
29
Not open to considering new opportunities
28.0%
14
Other (please specify)
1
answered question
50
What is your view on the level of difficulty in raising capital today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Slightly more difficult
11.1%
6
Moderately more difficult
27.8%
14
Significantly more difficult
22.2%
17
About the same
15.1%
8
Moderately easier
13.2%
7
Significantly easier
1.9%
1
Other (please specify)
3
answered question
53
What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Slightly more difficult
13.7%
7
Moderately more difficult
23.5%
12
Significantly more difficult
7.8%
4
About the same
43.1%
22
Moderately easier
9.8%
5
Significantly easier
2.0%
1
Other (please specify)
1
answered question
51
Percentage of inflows from new vs. existing investors
Firm Type
Traditional Asset Management – Independent
% Inflows from New
Investors
% Inflows from Existing
Investors
65.15
34.85
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 24
Traditional Asset Managers – Independent
How would you characterize your current state of mind?
% of
marketers
that raised
zero
capital
Notes
Firm Type
Year
Mean
Median
Range
# of
marketers
that raised
zero capital
Traditional
Asset Manager Independent
2012
$466,857,142
$180,000,000
$0 - $3,300,000,000
8/35
22.08%
Traditional
Asset Manager Independent
2013
*YTD
$771,478,947
$190,000,000
$0 - $4,000,000,000
4/40
10.00%
Minus 2
outliers at
$8bln and
$10bln for
2013 YTD
* YTD as of June 2013
What are your bonus expectations for 2013 compared to 2012?
Answer Options
Response Percent
Response Count
Increased by less than 10%
17.6%
9
Increased by 11% - 15%
11.8%
6
Increased by 16% - 20%
5.9%
3
Increased by 21% - 25%
5.9%
3
Increased by 26% - 30%
3.9%
2
Increased by 31% - 35%
2.0%
1
Increased by 36% - 40%
3.9%
2
Increased by greater than 40%
5.9%
3
Flat from my 2012 bonus
17.6%
9
Decreased by less than 10%
3.9%
2
Decreased by 11% - 15%
0.0%
0
Decreased by 16% - 20%
2.0%
1
Decreased by 21% - 25%
2.0%
1
Decreased by 26% - 30%
3.9%
2
Decreased by 31% - 35%
3.9%
2
Decreased by 36% - 40%
0.0%
0
Decreased by greater than 40%
0.0%
0
Still too early in the year to estimate
9.8%
5
Other (please specify)
0
answered question
51
Heidrick & Struggles 25
Traditional Asset Managers – Independent
Capital raising levels per marketer
Answer Options
Response Percent
Response Count
69.4%
34
Less than 10%
10% - $19%
8.2%
4
20% - 29%
16.3%
8
30% - 39%
4.1%
2
40% - 49%
0.0%
0
50% - 60%
2.0%
1
60% - 70%
0.0%
0
70%+
0.0%
0
answered question
49
What other components comprise your total compensation (check all that apply)?
Answer Options
Response Percent
Response Count
Stock options
48.3%
14
Participation in the funds
3.4%
1
Equity-like participation
37.9%
11
Sign on bonus
24.1%
7
Retention bonus
3.4%
1
Other (please specify)
7
answered question
29
Which option best characterizes your current bonus structure?
Answer Options
Response Percent
Response Count
Purely formulaic
14.0%
7
Loosely formulaic driven by metrics
16.0%
8
Purely Discretionary
36.0%
18
Part formula / part discretionary
34.0%
17
Other (please specify)
0
answered question
50
Which bonus structure do you prefer?
Answer Options
Response Percent
Response Count
Purely formulaic
23.5%
12
Loosely formulaic driven by metrics
11.8%
6
Purely Discretionary
11.8%
6
Part formula / part discretionary
51.0%
26
Agnostic
2.0%
1
Other (please specify)
0
answered question
51
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 26
Traditional Asset Managers – Independent
What percentage of your cash bonus was deferred in 2012?
Mean
Median
Range
# of sales/fundraising professionals
7.3
6
2 - 60
# of product specialists (for firms with product
specialists)
5.7
4
1 - 30
# of client-facing investor relations professionals
5.9
3
1 - 50
# of non–client-facing client services
professionals
6.9
4
0 - 50
Answer Options
Response Percent
Response Count
Geographically
59.6%
31
How is coverage among your current sales team (primarily) aligned?
Client Channel
17.3%
9
Product
1.9%
1
No formal alignment
21.2%
11
Other (please specify)
5
answered question
52
Where do product specialists at your firm report in to?
Answer Options
Response Percent
Response Count
Investment team
20.4%
10
Sales team
20.4%
10
Dual Reporting to investment and sales teams
14.3%
7
Not applicable - my firm does not employ product specialists
44.9%
22
Other (please specify)
4
answered question
49
How successful has the product specialist role been within your current firm?
Answered: 53
11%
Highly successful
21%
Moderately successful
19%
Neutral
Not very successful
Not at all successful
N/A - my firm does not
employ product specialists
4%
0%
45%
Heidrick & Struggles 27
Traditional Asset Managers – Independent
How are independent traditional asset managers structuring their distribution
efforts?
Answer Options
Currently actively recruiting
Response Percent
Response Count
10.4%
5
Opportunistically meeting potential candidates
27.1%
13
Team will remain flat through year-end
60.4%
29
Currently reducing the size of the team
2.1%
1
Other (please specify)
1
answered question
48
Asia: How would you best characterize your current firm’s hiring plans within *Asia* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
7.1%
3
Opportunistically meeting potential candidates
19.0%
8
Team will remain flat through year-end
21.4%
9
Currently actively recruiting
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in to Asia
52.4%
22
answered question
42
UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the
remainder of 2013?
Answer Options
Currently actively recruiting
Response Percent
Response Count
7.5%
3
Opportunistically meeting potential candidates
15.0%
6
Team will remain flat through year-end
25.0%
10
Currently reducing the size of the team
7.5%
3
No current presence or plans to expand in the UK or Europe
45.0%
18
Other (please specify)
0
answered question
40
Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
2.6%
1
Opportunistically meeting potential candidates
7.7%
3
Team will remain flat through year-end
12.8%
5
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the Middle East
76.9%
30
Other (please specify)
2
answered question
39
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 28
Traditional Asset Managers – Independent
US: How would you best characterize your current firm’s hiring plans within *US* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Exporting an existing team member overseas
8.3%
4
Hiring an outside candidate within the local region
58.3%
28
Cover the region from the US
12.5%
6
Not applicable: my current firm does not have a marketing presence
outside of the US
20.8%
10
Other (please specify)
0
answered question
48
How does your firm typically recruit sales & client services professionals? (Check all that apply)
Answer Options
Leveraging industry network
Response Percent
Response Count
42.9%
21
Sourcing investors
0.0%
0
LinkedIn
8.2%
4
Retained executive search
61.2%
30
Contingency executive search
16.3%
8
Professional associations
16.3%
8
Employee referrals
51.0%
25
Internal recruiting function
24.5%
12
Other (please specify)
2
answered question
49
Has your firm used retained search in the past 2 years to hire sales & client services professionals?
Answer Options
Response Percent
Response Count
Yes
60.0%
30
No
30.0%
15
I don't know
10.0%
answered question
5
50
Heidrick & Struggles 29
Traditional Asset Managers – Independent
In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?
Traditional Asset Managers – Independent:
Demographics
Answer Options
Response Percent
Response Count
0.0%
0
Senior Associate
0.0%
0
Vice President
14.3%
9
Senior Vice President
15.9%
10
Director/Principal
27.0%
17
Managing Director (individual contributor)
15.9%
10
Managing Director (management role)
25.4%
16
Partner
0.0%
0
N/A - Not currently employed
1.6%
1
Associate
Other (please specify)
8
answered question
63
How many years of total work experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
1.5%
1
11 - 15
14.7%
10
16 - 20
19.1%
13
21 - 25
35.3%
24
26+
29.4%
answered question
20
68
How many years of asset management distribution experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
21.7%
15
11 - 15
29.0%
20
16 - 20
26.1%
18
21 - 25
14.5%
10
26+
8.7%
6
answered question
69
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 30
Traditional Asset Managers – Independent
What is your current job title?
Answer Options
Response Percent
Response Count
New York
40.4%
23
Connecticut
8.8%
5
Boston
12.3%
7
Chicago
21.1%
12
San Francisco
5.3%
3
Los Angeles
5.3%
3
Minneapolis
0.0%
0
Philadelphia
5.3%
3
Miami
0.0%
0
Houston
0.0%
0
Dallas
1.8%
1
Washington D.C.
0.0%
0
Other (please specify)
12
answered question
57
Which investment products are offered by your current firm (check all that apply)?
Answer Options
Response Percent
Response Count
Long Only Equity
86.8%
59
Long Only Fixed Income
54.4%
37
Hedge Funds
26.5%
18
Private Equity
10.3%
7
Hedge Fund of Funds
13.2%
9
Private Equity Fund of Funds
8.8%
6
Real Estate
14.7%
10
Commodities
14.7%
10
Infrastructure
8.8%
6
Other (please specify)
5
answered question
68
How would you characterize the primary focus of your current role?
Answer Options
Sales / Fundraising
Response Percent
Response Count
56.7%
38
Investor Relations / Client Service (client facing)
3.0%
2
Investor Relations / Client Service (non-client facing / support)
3.0%
2
Hybrid Sales & Investor Relations
9.0%
6
Product Specialist
7.5%
5
Consultant Relations
20.9%
14
Other (please specify)
5
answered question
67
Heidrick & Struggles 31
Traditional Asset Managers – Independent
Where do you work?
Answer Options
Response Percent
Response Count
1.4%
1
$200mln - $500mln
1.4%
1
$500mln - $1bln
4.3%
3
$1bln
1.4%
1
$2bln
7.2%
5
$3bln
2.9%
2
$4bln
4.3%
3
$5bln
2.9%
2
$6bln
0.0%
0
$7bln
0.0%
0
$8bln
1.4%
1
$9bln
2.9%
2
$10bln
4.3%
3
$11bln
1.4%
1
$12bln
1.4%
1
$13bln
0.0%
0
$14bln
0.0%
0
$15bln
0.0%
0
$16bln
1.4%
1
$17bln
0.0%
0
$18bln
1.4%
1
$19bln
1.4%
1
$20bln - $29bln
11.6%
8
$30bln - $39bln
0.0%
0
$40bln - $49bln
8.7%
6
$50bln - $59bln
4.3%
3
$60bln+
33.3%
23
<$200mln
Other (please specify)
0
answered question
69
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 32
Traditional Asset Managers – Independent
What are the total assets under management of your current firm?
Traditional Asset Managers – Bank-Owned
for this category is relatively small and definite conclusions are difficult to draw. Nevertheless, we observed several
trends worth exploring.
There are a number of similarities between distribution professionals at bank-owned traditional asset managers and
their counterparts at independent firms. One difference we noted, however, has to do with changing jobs. More than
44% of respondents working for bank-owned traditional asset managers switched firms within the past three years,
compared to 57% of those at independent firms. Although the sample size is too small for statistical significance, we
can say that of the six individuals at bank-owned firms who reported about compensation in their new job, two saw
their compensation remain flat, three experienced an uptick and one saw a decrease; half were offered a minimum
bonus floor. This group ranked the opportunity to grow and build a marketing effort as the highest motivator for
changing firms.
About three-fifths of respondents (61.5%) said they were not looking to change jobs but were open to considering new
opportunities. It is worth noting that 15.4% of the respondents in the bank-owned category were not employed at the
time, compared to 0% of the respondents at independent traditional firms.
The percentage of marketers who think it is more difficult to raise capital today than three years ago is the same at
both bank-owned and independent traditional asset managers: 61%. Their views on capital retention also are virtually
identical, with about 45% of respondents in both categories saying capital retention was difficult. Reported inflow rates
were quite similar as well.
However, the median reported levels of capital raising per marketer were notably higher for bank-owned asset
managers, at $270 million for 2012 and $320 million YTD for 2013. This is most likely due to firm size rather than any
difference in talent, with 70% of respondents employed at bank-owned firms with more than $60 billion in assets
under management.
Another notable difference between the two groups relates to bonus expectations for 2013. About 36% of distribution
professionals with bank-owned asset managers said it’s still too early in the year to estimate bonuses, compared to
only 9.8% of those at independent firms.
Deferred bonus levels were essentially the same in both groups, with 70% reporting that less than 10% of their 2012
bonus was deferred.
We observed another notable difference regarding bonus structure: 78.6% of those at bank-owned firms characterized
their bonus as purely discretionary compared with 36% at independent firms. Given the small sample size, we are
curious whether there is truly such a difference between the two firm types. Most respondents in both groups
reported a preference for a part formulaic/part discretionary bonus structure.
How are bank-owned traditional asset managers structuring their distribution efforts? Because they are working at
larger organizations, the distribution teams at bank-owned traditional asset managers tend to be much larger than
those at independent firms, with an average of 24 sales and fundraising professionals who are aligned primarily by
geography (55.6%) or client channel (44.4%). None of the 18 respondents to this question chose “no formal alignment”
when describing their team’s structure, a notable difference from the independent firms, where 21.2% of respondents
said that was the case.
Heidrick & Struggles 33
Traditional Asset Managers – Bank-Owned
With only 27 survey respondents characterizing their firms as bank-owned traditional asset managers, our sample size
firms said their product specialists report to the investment team; at independent firms, reporting lines were equally
divided, with 20.4% reporting to the investment team and 20.4% to the sales team. Only 17.6% of respondents said
their firms do not employ product specialists, compared to 44.9% at independent managers. Those at bank-owned
firms also viewed the product specialist role within their firm as more successful than their independent counterparts,
with 38.89% of respondents choosing “highly successful” when asked to rate the function’s effectiveness.
The hiring forecast for the remainder of 2013 in the United States among bank-owned traditional asset managers looks
quite similar to the independent firms, with 16.7% of respondents saying their firms were actively recruiting at the
time of the survey (June 2013) and 33.3% saying their firms were opportunistically meeting candidates. In Asia, hiring
seems more robust, with 16.7% of respondents reporting their firms were actively recruiting and 25% opportunistically
meeting candidates. However, we need to be mindful that our sample size of 12 on this question is likely too small
to draw a solid conclusion. Similarly, while we are excited to see 18.2% of firms actively recruiting in the UK/Europe
region, our sample size on this question is 11 respondents.
Overall, while the small sample makes it difficult to support any firm views about this category, it is interesting to note
some of the characteristics that are unique to distribution professionals at bank-owned traditional asset managers,
not the least being how they characterize themselves given the diversity of products reported on these platforms (see
demographics below).
What is the highest level of education you have completed?
Answer Options
Response Percent
Response Count
Bachelor's Degree
25.9%
7
Master's Degree (non MBA)
25.9%
7
MBA
48.1%
13
Ph.D.
0.0%
0
answered question
27
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
44.4%
8
No
55.6%
10
answered question
18
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 34
Traditional Asset Managers – Bank-Owned
Product specialists are another differentiator between the two groups. About 53% of respondents at bank-owned
Answer Options
Response Percent
Response Count
Remained Flat
33.3%
2
Increased by 1% - 9%
16.7%
1
Increased by 10% - 19%
0.0%
0
Increased by 20% - 29%
0.0%
0
Increased by 30% - 39%
0.0%
0
Increased by 40%+
33.3%
2
Decreased by 1% - 9%
0.0%
0
Decreased by 10% - 19%
0.0%
0
Decreased by 20% - 29%
16.7%
1
Decreased by 30% - 39%
0.0%
0
Decreased by 40%+
0.0%
answered question
0
6
If you changed firms, were you offered a (check all that apply):
Answer Options
Response Percent
Response Count
Sign-on bonus
16.7%
1
Buy out of equity
16.7%
1
Make whole bonus (100% of anticipated bonus at previous firm)
16.7%
1
Minimum bonus floor (% of anticipated bonus at previous firm)
50.0%
3
Not applicable
33.3%
2
Other (please specify)
0
answered question
6
Heidrick & Struggles 35
Traditional Asset Managers – Bank-Owned
If you changed firms within the past three years, by what percentage did your total compensation change?
Answered: 6
7.60
Management opportunity
8.33
Compensation
7.60
Firm Culture
7.80
Brand
9.33
Marketability of products
7.75
Layoffs or restructuring
Ability to have influence outside of
fundraising
6.67
8.80
Level of value placed on marketing
8.83
People
Opportunity to grow/build the
marketing effort
Greater opportunities for advancement
Firm's willingness to meet client
expectataions
10.82
6.83
4.60
How would you characterize your current state of mind?
Answer Options
Response Percent
Response Count
15.4%
2
Actively looking (currently employed)
7.7%
1
Not looking but open to considering new opportunities if presented
61.5%
8
Not open to considering new opportunities
15.4%
2
Actively looking (unemployed)
Other (please specify)
1
answered question
13
What is your view on the level of difficulty in raising capital today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Slightly more difficult
11.1%
2
Moderately more difficult
27.8%
5
Significantly more difficult
22.2%
4
About the same
22.2%
4
Moderately easier
11.1%
2
Significantly easier
5.6%
1
Other (please specify)
0
answered question
18
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 36
Traditional Asset Managers – Bank-Owned
If you changed firms in the past 3 years, please rank your primary motivation(s) for
change:
Answer Options
Response Percent
Response Count
Slightly more difficult
16.7%
3
Moderately more difficult
16.7%
3
Significantly more difficult
11.1%
2
About the same
38.9%
7
Moderately easier
11.1%
2
Significantly easier
5.6%
1
Other (please specify)
0
answered question
18
Percentage of inflows from new vs. existing investors
Firm Type
% Inflows from New
Investors
% Inflows from Existing
Investors
70.00
30.00
Traditional Asset Management – Bank-Owned
Capital raising levels per marketer
Firm Type
Year
Mean
Median
Range
# of
marketers
that raised
zero capital
% of
marketers
that raised
zero capital
Traditional Asset
Manager - Bank Owned
2012
$805,538,461
$270,000,000
$0 - $3,000,000,000
2/15
13.33%
Traditional Asset
Manager - Bank Owned
2013
*YTD
$1,061,785,714
$320,000,000
$0 - $5,000,000,000
2/14
14.28%
Notes
* YTD as of June 2013
Heidrick & Struggles 37
Traditional Asset Managers – Bank-Owned
What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?
Answer Options
Response Percent
Response Count
14.3%
2
Increased by 11% - 15%
7.1%
1
Increased by 16% - 20%
7.1%
1
Increased by 21% - 25%
14.3%
2
Increased by 26% - 30%
0.0%
0
Increased by 31% - 35%
0.0%
0
Increased by 36% - 40%
0.0%
0
Increased by greater than 40%
0.0%
0
Flat from my 2012 bonus
14.3%
2
Decreased by less than 10%
7.1%
1
Decreased by 11% - 15%
0.0%
0
Decreased by 16% - 20%
0.0%
0
Decreased by 21% - 25%
0.0%
0
Decreased by 26% - 30%
0.0%
0
Decreased by 31% - 35%
0.0%
0
Decreased by 36% - 40%
0.0%
0
Decreased by greater than 40%
0.0%
0
Still too early in the year to estimate
35.7%
5
Increased by less than 10%
Other (please specify)
2
answered question
14
What percentage of your cash bonus was deferred in 2012?
Answer Options
Response Percent
Response Count
Less than 10%
70.6%
12
10% - $19%
5.9%
1
20% - 29%
11.8%
2
30% - 39%
5.9%
1
40% - 49%
0.0%
0
50% - 60%
5.9%
1
60% - 70%
0.0%
0
70%+
0.0%
0
answered question
17
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 38
Traditional Asset Managers – Bank-Owned
What are your bonus expectations for 2013 compared to 2012?
Answer Options
Stock options
Response Percent
Response Count
33.3%
3
Participation in the funds
11.1%
1
Equity-like participation
44.4%
4
Sign on bonus
11.1%
1
Retention bonus
22.2%
2
Other (please specify)
2
answered question
9
Which option best characterizes your current bonus structure?
Answer Options
Response Percent
Response Count
Purely formulaic
0.0%
0
Loosely formulaic driven by metrics
7.1%
1
Purely Discretionary
78.6%
11
Part formula / part discretionary
14.3%
2
Other (please specify)
0
answered question
14
Which bonus structure do you prefer?
Answer Options
Response Percent
Response Count
Purely formulaic
0.0%
0
Loosely formulaic driven by metrics
14.3%
2
Purely Discretionary
14.3%
2
Part formula / part discretionary
64.3%
9
7.1%
1
Agnostic
Other (please specify)
0
answered question
14
How are Bank-Owned Traditional Asset Managers structuring their distribution
efforts?
Mean
Median
Range
# of sales/fundraising professionals
24
10.5
2 - 100
# of product specialists (for firms with product
specialists)
5.2
3.5
1 - 15
# of client facing investor relations professionals
4.3
3
2 - 10
# of non - client facing client services
professionals
10.1
6
1 - 50
Heidrick & Struggles 39
Traditional Asset Managers – Bank-Owned
What other components comprise your total compensation (check all that apply)?
Answer Options
Response Percent
Response Count
Geographically
55.6%
10
Client Channel
44.4%
8
Product
0.0%
0
No formal alignment
0.0%
0
Other (please specify)
0
answered question
18
Where do product specialists at your firm report in to?
Answer Options
Response Percent
Response Count
Investment team
52.9%
9
Sales team
23.5%
4
Dual Reporting to investment and sales teams
5.9%
1
Not applicable - my firm does not employ product specialists
17.6%
3
Other (please specify)
2
answered question
17
How successful has the product specialist role been within your current firm?
Answered: 18
39%
Highly successful
17%
Moderately successful
22%
Neutral
6%
Not very successful
Not at all successful
N/A - my firm does not
employ product specialists
0%
17%
US: How would you best characterize your current firm’s hiring plans within *US* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
16.7%
2
Opportunistically meeting potential candidates
33.3%
4
Team will remain flat through year-end
50.0%
6
Currently reducing the size of the team
0.0%
0
Other (please specify)
0
answered question
12
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 40
Traditional Asset Managers – Bank-Owned
How is coverage among your current sales team (primarily) aligned?
Answer Options
Response Percent
Response Count
Currently actively recruiting
16.7%
2
Opportunistically meeting potential candidates
25.0%
3
Team will remain flat through year-end
0.0%
0
Currently reducing the size of the team
8.3%
1
No current presence or plans to expand in to Asia
50.0%
6
answered question
12
UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
18.2%
2
Opportunistically meeting potential candidates
9.1%
1
Team will remain flat through year-end
9.1%
1
Currently actively recruiting
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the UK or Europe
63.6%
7
Other (please specify)
0
answered question
11
Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the
remainder of 2013?
Answer Options
Currently actively recruiting
Response Percent
Response Count
0.0%
0
Opportunistically meeting potential candidates
0.0%
0
Team will remain flat through year-end
18.2%
2
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the Middle East
81.8%
9
Other (please specify)
0
answered question
11
In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?
Answer Options
Exporting an existing team member overseas
Hiring an outside candidate within the local region
Cover the region from the US
Not applicable: my current firm does not have a marketing presence
outside of the US
Response Percent
Response Count
9.1%
1
63.6%
7
9.1%
1
18.2%
2
Other (please specify)
2
answered question
11
Heidrick & Struggles 41
Traditional Asset Managers – Bank-Owned
Asia: How would you best characterize your current firm’s hiring plans within *Asia* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Leveraging industry network
38.5%
5
Sourcing investors
0.0%
0
LinkedIn
7.7%
1
Retained executive search
69.2%
9
Contingency executive search
23.1%
3
Professional associations
7.7%
1
Employee referrals
46.2%
6
Internal recruiting function
15.4%
2
Other (please specify)
0
answered question
13
Has your firm used retained search in the past 2 years to hire sales & client services professionals?
Answer Options
Response Percent
Response Count
Yes
57.1%
8
No
21.4%
3
I don't know
21.4%
answered question
3
14
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 42
Traditional Asset Managers – Bank-Owned
How does your firm typically recruit sales & client services professionals? (Check all that apply)
Traditional Asset Managers – Bank Owned:
Demographics
Answer Options
Response Percent
Response Count
0.0%
0
Senior Associate
0.0%
0
Vice President
13.0%
3
Senior Vice President
17.4%
4
Director/Principal
13.0%
3
Managing Director (individual contributor)
8.7%
2
Managing Director (management role)
39.1%
9
Partner
0.0%
0
N/A - Not currently employed
8.7%
2
Associate
Other (please specify)
4
answered question
23
How many years of total work experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
0.0%
0
11 - 15
11.1%
3
16 - 20
33.3%
9
21 - 25
25.9%
7
26+
29.6%
8
answered question
27
How many years of asset management distribution experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
11.1%
3
11 - 15
25.9%
7
16 - 20
37.0%
10
21 - 25
14.8%
4
26+
11.1%
3
answered question
27
Heidrick & Struggles 43
Traditional Asset Managers – Bank-Owned
What is your current job title?
Answer Options
Response Percent
Response Count
50.0%
10
Connecticut
5.0%
1
Boston
25.0%
5
Chicago
10.0%
2
San Francisco
5.0%
1
Los Angeles
0.0%
0
Minneapolis
0.0%
0
Philadelphia
5.0%
1
Miami
0.0%
0
Houston
0.0%
0
Dallas
0.0%
0
Washington D.C.
0.0%
0
New York
Other (please specify)
7
answered question
20
Which investment products are offered by your current firm (check all that apply)?
Answer Options
Response Percent
Response Count
Long Only Equity
74.1%
20
Long Only Fixed Income
77.8%
21
Hedge Funds
33.3%
9
Private Equity
18.5%
5
Hedge Fund of Funds
18.5%
5
Private Equity Fund of Funds
14.8%
4
Real Estate
29.6%
8
Commodities
22.2%
6
Infrastructure
18.5%
5
Other (please specify)
4
answered question
27
How would you characterize the primary focus of your current role?
Answer Options
Response Percent
Response Count
Sales / Fundraising
62.5%
15
Investor Relations / Client Service (client facing)
8.3%
2
Investor Relations / Client Service (non client facing / support)
0.0%
0
Hybrid Sales & Investor Relations
4.2%
1
Product Specialist
0.0%
0
Consultant Relations
25.0%
6
Other (please specify)
2
answered question
24
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 44
Traditional Asset Managers – Bank-Owned
Where do you work?
Answer Options
<$200mln
Response Percent
Response Count
0.0%
0
$200mln - $500mln
0.0%
0
$500mln - $1bln
0.0%
0
$1bln
0.0%
0
$2bln
0.0%
0
$3bln
0.0%
0
$4bln
0.0%
0
$5bln
3.7%
1
$6bln
0.0%
0
$7bln
3.7%
1
$8bln
0.0%
0
$9bln
0.0%
0
$10bln
0.0%
0
$11bln
0.0%
0
$12bln
0.0%
0
$13bln
0.0%
0
$14bln
0.0%
0
$15bln
0.0%
0
$16bln
0.0%
0
$17bln
0.0%
0
$18bln
0.0%
0
$19bln
0.0%
0
$20bln - $29bln
11.1%
3
$30bln - $39bln
7.4%
2
$40bln - $49bln
0.0%
0
$50bln - $59bln
3.7%
1
$60bln+
70.4%
19
Other (please specify)
0
answered question
27
Heidrick & Struggles 45
Traditional Asset Managers – Bank-Owned
What are the total assets under management of your current firm?
Multi-Product Asset Manager – Independent
organizations, including many firms that have recently expanded beyond their historical roots. We did not clearly
define parameters for inclusion in this category; rather, survey participants self-selected into this group through
question 7, “How would you characterize your current firm?”
The profile of the talent pool for independent multi-product asset managers mirrors the overall industry in terms
of academics, although respondents in this category reported a slightly higher rate of CFA designation (22.68%)
compared to the industry as a whole (17.4%).
Movement rates during the past three years were also similar at 52.6%. The majority (50.9%) of individuals at
independent multi-product organizations who changed firms saw a compensation increase, with 28.6% remaining flat
and 20.3% experiencing a decrease. Candidates who joined independent multi-product firms reported higher rates
for sign-on bonuses (38.1%), equity buy-outs (16.7%), make-whole bonuses (16.7%) and minimum bonus floors (40.5%)
than the industry as a whole.
Firm culture was the highest-ranked motivator for making a move, with compensation ranking second; the
opportunity to grow and build the marketing effort was tied for third with people. Respondents characterized their
current state of mind as follows: 27.1% actively looking, 48.6% not looking but open to considering new opportunities
and 24.3% not open to considering new opportunities.
The perceived level of difficulty for capital raising and retention among distribution professionals at independent
multi-product firms mirrors that of the industry overall, with 59.2% of respondents saying fundraising is more difficult
and 50.7% saying client retention is more difficult than three years ago. Respondents reported that 71.12% of inflows
in 2012 came from new investors, slightly higher than the industry average. The median amount of capital raised per
marketer at independent multi-product firms was $250 million in 2012 and $300 million YTD for 2013. It is worth noting
that five outliers cited significant capital raises ranging from $6 billion to $12 billion for 2013.
Bonus expectations for 2013 are similar to the overall industry, with a slightly higher percentage of respondents (60.1%)
expecting an increase in their total compensation, 14.7% expecting bonuses to remain flat, 7.8% expecting a decrease
and 17.3% indicating it was still too early in the year to estimate. We did not find any meaningful differences in the
way total compensation is structured, with similar rates of deferred compensation, stock options, participation in the
funds, equity-like participation, sign-on bonuses and retention bonuses. Bonus structure is also similar to the industry
norm, with 14.7% of respondents on a purely formulaic plan. The only interesting difference we observed was a higher
preference among distribution professionals at independent multi-asset firms for a purely formulaic structure, with
26.7% of respondents expressing a preference for a purely formulaic structure compared to the industry average of
16.6%.
Distribution teams in this category are more likely to be formally structured than in the industry as a whole, with 57.9%
of respondents indicating the teams are aligned by geography, 26.3% by client channel and 2.6% by product; only
13.2% of respondents indicated no formal alignment.
The product specialist role is fairly common within independent multi-product firms, with only 15.3% of respondents
saying their firm does not have this function. About 43% of respondents indicated that product specialists report to the
investment team, 30.6% to the sales team and 11.1% have a dual reporting line. Overall, the product specialist function
seems to be viewed positively and successfully by the great majority of survey participants.
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 46
Multi-Product Asset Managers – Independent
Our survey of distribution professionals at multi-product asset managers includes responses from a wide range of
Interestingly, activity (number of meetings, etc.) was cited as the leading performance metric for multi-product asset
managers. In addition to capital raising and retention, the top three performance metrics were (in order):
1. Activity
2. Team collaboration
3. Firm building
Hiring activity for distribution professionals among independent multi-product asset managers is mixed. 17.1%
of respondents said their firms were actively recruiting distribution professionals in the United States and 34.2%
were opportunistically meeting candidates—recruiting rates that are similar to the industry overall. Growth and
penetration outside the U.S. seem much stronger for the independent multi-product managers than the broader
industry, however. Only 32.8% of respondents said their firm has no presence or plans to expand in Asia compared to
an industry average of 48.1%. The numbers for UK/Europe are 20.9% and 40.6% respectively, and 44.8% compared to
64.6% for the Middle East.
What is the highest level of education you have completed?
Answer Options
Response Percent
Response Count
Bachelor's Degree
42.0%
42
Master's Degree (non MBA)
12.0%
12
MBA
44.0%
44
Ph.D.
2.0%
2
answered question
100
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
52.6%
40
No
47.4%
36
answered question
76
If yes, by what percentage did your total compensation change?
Answer Options
Response Percent
Response Count
Remained Flat
28.6%
14
Increased by 1% - 9%
2.0%
1
Increased by 10% - 19%
8.2%
4
Increased by 20% - 29%
16.3%
8
Increased by 30% - 39%
12.2%
6
Increased by 40%+
12.2%
6
Decreased by 1% - 9%
2.0%
1
Decreased by 10% - 19%
6.1%
3
Decreased by 20% - 29%
4.1%
2
Decreased by 30% - 39%
2.0%
1
Decreased by 40%+
6.1%
answered question
3
49
Heidrick & Struggles 47
Multi-Product Asset Managers – Independent
Beyond capital raising and retention, how are independent multi-asset managers measuring performance?
Answer Options
Response Percent
Response Count
Sign-on bonus
38.1%
16
Buy out of equity
16.7%
7
Make whole bonus (100% of anticipated bonus at previous firm)
16.7%
7
Minimum bonus floor (% of anticipated bonus at previous firm)
40.5%
17
Not applicable
31.0%
13
Other (please specify)
3
answered question
42
If you changed firms in the past 3 years, please rank your primary motivation(s) for
change:
Answered: 40
Management opportunity
5.44
8.87
Compensation
9.74
Firm Culture
7.16
Brand
8.73
Marketability of products
Layoffs or restructuring
Ability to have influence outside of
fundraising
6.81
6.43
7.24
Level of value placed on marketing
People
8.85
Opportunity to grow/build the
marketing effort
8.85
Greater opportunities for advancement
Firm's willingness to meet client
expectataions
8.55
6.06
How would you characterize your current state of mind?
Answer Options
Actively looking (unemployed)
Response Percent
Response Count
6.8%
5
Actively looking (currently employed)
20.3%
15
Not looking but open to considering new opportunities if presented
48.6%
36
Not open to considering new opportunities
24.3%
18
Other (please specify)
4
answered question
74
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 48
Multi-Product Asset Managers – Independent
If you changed firms, were you offered a (check all that apply):
Answer Options
Response Percent
Response Count
5.3%
4
Moderately more difficult
28.9%
22
Significantly more difficult
25.0%
19
Slightly more difficult
About the same
17.1%
13
Moderately easier
21.1%
16
Significantly easier
2.6%
2
Other (please specify)
0
answered question
76
What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?
Answer Options
Response Percent
Response Count
6.5%
5
Slightly more difficult
Moderately more difficult
27.3%
21
Significantly more difficult
16.9%
13
About the same
40.3%
31
Moderately easier
9.1%
7
Significantly easier
0.0%
0
Other (please specify)
1
answered question
77
Percentage of inflows from new vs. existing investors
Firm Type
% Inflows from New
Investors
% Inflows from Existing
Investors
71.12
28.88
Multiproduct Asset Managers – Independent
Capital raising levels per marketer
Firm Type
Year
Mean
Median
Range
# of
marketers
that raised
zero
capital
Multi-Product
Asset Manager Independent
2012
$459,826,923
$250,000,000
$0 - $3,000,000,000
5/52
9.61%
Multi-Product
Asset Manager Independent
2013
*YTD
$1,167,061,403
$300,000,000
$0 - $5,000,000,000
6/58
10.34%
% of
marketers
that raised
zero capital
Notes
Excluding 5
outliers citing
$6bln, $7bln,
$8bln, $10bln
and $12bln
*YTD as of June 2013
Heidrick & Struggles 49
Multi-Product Asset Managers – Independent
What is your view on the level of difficulty in raising capital today compared to 3 years ago?
Answer Options
Response Percent
Response Count
12.0%
9
Increased by 11% - 15%
13.3%
10
Increased by 16% - 20%
12.0%
9
Increased by 21% - 25%
6.7%
5
Increased by 26% - 30%
2.7%
2
Increased by 31% - 35%
4.0%
3
Increased by 36% - 40%
2.7%
2
Increased by greater than 40%
6.7%
5
Flat from my 2012 bonus
14.7%
11
Decreased by less than 10%
1.3%
1
Decreased by 11% - 15%
1.3%
1
Decreased by 16% - 20%
1.3%
1
Decreased by 21% - 25%
0.0%
0
Decreased by 26% - 30%
0.0%
0
Decreased by 31% - 35%
1.3%
1
Decreased by 36% - 40%
1.3%
1
Increased by less than 10%
Decreased by greater than 40%
1.3%
1
Still too early in the year to estimate
17.3%
13
Other (please specify)
2
answered question
75
What percentage of your cash bonus was deferred in 2012?
Answer Options
Response Percent
Response Count
Less than 10%
63.0%
46
10% - $19%
6.8%
5
20% - 29%
17.8%
13
30% - 39%
5.5%
4
40% - 49%
1.4%
1
50% - 60%
4.1%
3
60% - 70%
1.4%
1
70%+
0.0%
0
answered question
73
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 50
Multi-Product Asset Managers – Independent
What are your bonus expectations for 2013 compared to 2012?
Answer Options
Response Percent
Response Count
Stock options
34.7%
17
Participation in the funds
24.5%
12
Equity-like participation
49.0%
24
Sign on bonus
16.3%
8
Retention bonus
14.3%
7
Other (please specify)
4
answered question
49
Which option best characterizes your current bonus structure?
Answer Options
Response Percent
Response Count
Purely formulaic
14.7%
11
Loosely formulaic driven by metrics
14.7%
11
Purely Discretionary
38.7%
29
Part formula / part discretionary
32.0%
24
Other (please specify)
2
answered question
75
Which bonus structure do you prefer?
Answer Options
Response Percent
Response Count
Purely formulaic
26.7%
20
Loosely formulaic driven by metrics
12.0%
9
Purely Discretionary
8.0%
6
Part formula / part discretionary
48.0%
36
Agnostic
5.3%
4
Other (please specify)
3
answered question
75
How are independent multi-product asset managers structuring their distribution
efforts?
Mean
Median
Range
# of sales/fundraising professionals
17.8
9
2 - 100
# of product specialists (for firms with product
specialists)
9.25
5
1 - 60
# of client facing investor relations professionals
9.6
5
1 - 60
# of non - client facing client services
professionals *
14.1
8
1 – 100
*Excluding one outlier respondent who cited 320 non-client facing client services professionals at their firm
Heidrick & Struggles 51
Multi-Product Asset Managers – Independent
What other components comprise your total compensation (check all that apply)??
Answer Options
Response Percent
Response Count
Geographically
57.9%
44
Client Channel
26.3%
20
Product
2.6%
2
No formal alignment
13.2%
10
Other (please specify)
7
answered question
76
Where do product specialists at your firm report in to?
Answer Options
Response Percent
Response Count
Investment team
43.1%
31
Sales team
30.6%
22
Dual Reporting to investment and sales teams
11.1%
8
Not applicable - my firm does not employ product specialists
15.3%
11
Other (please specify)
5
answered question
72
How successful has the product specialist role been within your current firm?
Answered: 75
27%
Highly successful
36%
Moderately successful
15%
Neutral
Not very successful
Not at all successful
3%
0%
N/A - my firm does not
employ product specialists
20%
US: How would you best characterize your current firm’s hiring plans within *US* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
17.1%
13
Opportunistically meeting potential candidates
34.2%
26
Team will remain flat through year-end
44.7%
34
Currently reducing the size of the team
3.9%
3
Other (please specify)
0
answered question
76
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 52
Multi-Product Asset Managers – Independent
How is coverage among your current sales team (primarily) aligned?
Answer Options
Response Percent
Response Count
Currently actively recruiting
11.9%
8
Opportunistically meeting potential candidates
26.9%
18
Team will remain flat through year-end
26.9%
18
Currently reducing the size of the team
1.5%
1
No current presence or plans to expand in to Asia
32.8%
22
answered question
67
UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
10.4%
7
Opportunistically meeting potential candidates
25.4%
17
Team will remain flat through year-end
41.8%
28
Currently reducing the size of the team
1.5%
1
No current presence or plans to expand in the UK or Europe
20.9%
14
Other (please specify)
0
answered question
67
Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the
remainder of 2013?
Answer Options
Currently actively recruiting
Response Percent
Response Count
3.0%
2
Opportunistically meeting potential candidates
14.9%
10
Team will remain flat through year-end
35.8%
24
Currently reducing the size of the team
No current presence or plans to expand in the Middle East
1.5%
1
44.8%
30
Other (please specify)
1
answered question
67
In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?
Answer Options
Response Percent
Response Count
Exporting an existing team member overseas
21.5%
14
Hiring an outside candidate within the local region
56.9%
37
Cover the region from the US
7.7%
5
Not applicable: my current firm does not have a marketing presence
outside of the US
13.8%
9
Other (please specify)
6
answered question
65
Heidrick & Struggles 53
Multi-Product Asset Managers – Independent
Asia: How would you best characterize your current firm’s hiring plans within *Asia* distribution for the remainder of 2013?
Answer Options
Leveraging industry network
Response Percent
Response Count
58.3%
42
Sourcing investors
6.9%
5
LinkedIn
15.3%
11
Retained executive search
55.6%
40
Contingency executive search
27.8%
20
Professional associations
12.5%
9
Employee referrals
54.2%
39
Internal recruiting function
37.5%
27
Other (please specify)
0
answered question
72
Has your firm used retained search in the past 2 years to hire sales & client services professionals?
Answer Options
Response Percent
Response Count
Yes
53.4%
39
No
21.9%
16
I don't know
24.7%
answered question
18
73
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 54
Multi-Product Asset Managers – Independent
How does your firm typically recruit sales & client services professionals? (Check all that apply)
Multi-Product Asset Manager – Independent:
Demographics
Answer Options
Associate
Response Percent
Response Count
0.0%
0
Senior Associate
0.0%
0
Vice President
24.7%
22
Senior Vice President
19.1%
17
Director/Principal
19.1%
17
Managing Director (individual contributor)
18.0%
16
Managing Director (management role)
11.2%
10
Partner
5.6%
5
N/A - Not currently employed
2.2%
2
Other (please specify)
11
answered question
89
How many years of total work experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
5.0%
5
11 - 15
26.0%
26
16 - 20
21.0%
21
21 - 25
34.0%
34
26+
14.0%
14
answered question
100
How many years of asset management distribution experience do you have?
Answer Options
5 - 10
Response Percent
Response Count
36.7%
36
11 - 15
21.4%
21
16 - 20
23.5%
23
21 - 25
11.2%
11
7.1%
7
26+
answered question
98
Heidrick & Struggles 55
Multi-Product Asset Managers – Independent
What is your current job title?
Answer Options
Response Percent
Response Count
52.3%
46
New York
Connecticut
4.5%
4
Boston
10.2%
9
Chicago
13.6%
12
San Francisco
9.1%
8
Los Angeles
8.0%
7
Minneapolis
0.0%
0
Philadelphia
2.3%
2
Miami
0.0%
0
Houston
0.0%
0
Dallas
0.0%
0
Washington D.C.
0.0%
0
Other (please specify)
14
answered question
88
Which investment products are offered by your current firm (check all that apply)?
Answer Options
Response Percent
Response Count
Long Only Equity
81.6%
80
Long Only Fixed Income
70.4%
69
Hedge Funds
71.4%
70
Private Equity
46.9%
46
Hedge Fund of Funds
27.6%
27
Private Equity Fund of Funds
23.5%
23
Real Estate
46.9%
46
Commodities
38.8%
38
Infrastructure
27.6%
27
Other (please specify)
10
answered question
98
How would you characterize the primary focus of your current role?
Answer Options
Response Percent
Response Count
Sales / Fundraising
57.6%
53
Investor Relations / Client Service (client facing)
6.5%
6
Investor Relations / Client Service (non client facing / support)
0.0%
0
Hybrid Sales & Investor Relations
13.0%
12
Product Specialist
3.3%
3
Consultant Relations
19.6%
18
Other (please specify)
10
answered question
92
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 56
Multi-Product Asset Managers – Independent
Where do you work?
Answer Options
Response Percent
Response Count
<$200mln
1.0%
1
$200mln - $500mln
1.0%
1
$500mln - $1bln
2.1%
2
$1bln
5.2%
5
$2bln
0.0%
0
$3bln
5.2%
5
$4bln
2.1%
2
$5bln
1.0%
1
$6bln
0.0%
0
$7bln
2.1%
2
$8bln
3.1%
3
$9bln
1.0%
1
$10bln
1.0%
1
$11bln
1.0%
1
$12bln
0.0%
0
$13bln
0.0%
0
$14bln
0.0%
0
$15bln
1.0%
1
$16bln
0.0%
0
$17bln
0.0%
0
$18bln
0.0%
0
$19bln
0.0%
0
$20bln - $29bln
7.2%
7
$30bln - $39bln
0.0%
0
$40bln - $49bln
4.1%
4
$50bln - $59bln
4.1%
4
$60bln+
57.7%
56
Other (please specify)
4
answered question
97
Heidrick & Struggles 57
Multi-Product Asset Managers – Independent
What are the total assets under management of your current firm?
Multi-Product Asset Manager – Bank-Owned
independent counterparts, but there are still a number of observations worth sharing about this talent pool.
There was a higher percentage of distribution professionals with MBAs at bank-owned firms (51.9%) than at their
independent counterparts. They changed jobs less frequently, with 42.5% having switched firms during the past
three years. Of those who did, 52.6% received a compensation increase. They were less likely to receive a sign-on
or make-whole bonus when accepting a new position, but were equally likely to receive a buy-out of equity and a
minimum bonus floor. The highest-ranking motivators for changing firms were the opportunity to grow and build the
marketing effort, followed by compensation and the level of value placed on marketing within the firm. Firm culture
ranked seventh. In contrast, firm culture ranked highest among distribution professionals at independent multi-asset
managers and second across the industry overall.
Another difference we observed with this group is their state of mind. Only 18.5% were actively looking for a new
position, which is lower than the industry overall or their peers at independent platforms. A large majority (68.4%) said
they were not looking but open to considering new opportunities if presented.
The perception of difficulty for raising and retaining capital among respondents at bank-owned multi-product
firms was high, with 67.5%% saying capital raising was significantly more difficult than three years ago and 47.5%
saying retention was more difficult. Capital from new investors made up 63.42% of inflows, on par with the industry
average but a bit lower than the independent firms. Interestingly, median amounts of capital raised per marketer in
this category were the same as their peers at independent firms in 2012 but are lower mid-way through 2013, with
respondents reporting a median of $250 million in 2012 and $115 million YTD in 2013.
Respondents were fairly confident about bonus expectations for 2013, with the majority (57.5%) expecting an
increase, 15% expecting bonuses to remain flat, 7.5% expecting a decrease and 20% saying it’s too early in the year
to estimate. Not surprisingly, deferred compensation rates were higher for this group, with 45.9% reporting deferred
bonus percentages of greater than 10% in 2012, with a range of 10%-70%. Other components of compensation are
fairly standard and include stock options, fund participation, equity-like participation, sign-on bonuses and retention
bonuses. Respondents at independent multi-product firms are more likely to receive stock options and less likely
to participate in the funds than their peers at independent firms. This group is also less likely to be paid on a purely
formulaic basis; the most common model is part formula/part discretionary, indicated by 50% of respondents. That
model lines up with this group’s preferred bonus structure, an alignment not found in many of the other firm types we
studied.
Distribution teams are most frequently aligned by geography (56.8%) and are more likely to be formally structured
than the industry overall. Product specialists are common, with just 16.2% of respondents saying their firm does
not have that function. At bank-owned firms that use product specialists, they are more likely to report solely to
the investment teams (51.4%) compared to the broader industry (26.3%). Most respondents viewed this function as
moderately successful within their firms.
Beyond capital raising and retention, how are bank-owned multi-product firms measuring performance? The top three
performance metrics were essentially tied:
1. Team collaboration
2. Strategic firm building
3. Activity
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 58
Multi-Product Asset Managers – Bank-Owned
The sample size of 52 respondents for bank-owned multi-product firms is only about half the number of their
United States, with 27% of respondents saying there firms were actively recruiting and 32.4% opportunistically
meeting candidates. These firms also seem to have a strong global presence and interest, with fewer respondents
saying their firm does not have a current presence or plan to expand in Asia, UK/Europe or the Middle East. Hiring
activity in this category across all of these geographies appears to be more robust than in the industry overall.
What is the highest level of education you have completed
Answer Options
Bachelor's Degree
Response Percent
Response Count
38.5%
20
Master's Degree (non MBA)
5.8%
3
MBA
51.9%
27
Ph.D.
3.8%
answered question
2
52
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
42.5%
17
No
57.5%
answered question
23
40
If yes, by what percentage did your total compensation change?
Answer Options
Response Percent
Response Count
Remained Flat
26.3%
5
Increased by 1% - 9%
10.5%
2
Increased by 10% - 19%
26.3%
5
Increased by 20% - 29%
15.8%
3
Increased by 30% - 39%
10.5%
2
Increased by 40%+
0.0%
0
Decreased by 1% - 9%
5.3%
1
Decreased by 10% - 19%
0.0%
0
Decreased by 20% - 29%
0.0%
0
Decreased by 30% - 39%
0.0%
0
Decreased by 40%+
5.3%
answered question
1
19
Heidrick & Struggles 59
Multi-Product Asset Managers – Bank-Owned
The hiring outlook for the remainder of 2013 for bank owned multi-product firms seems moderately strong in the
Answer Options
Response Percent
Response Count
Sign-on bonus
21.4%
3
Buy out of equity
14.3%
2
7.1%
1
Make whole bonus (100% of anticipated bonus at previous firm)
Minimum bonus floor (% of anticipated bonus at previous firm)
35.7%
5
Not applicable
42.9%
6
Other (please specify)
2
answered question
14
If you changed firms in the past 3 years, please rank your primary motivation(s) for
change:
Answered: 18
7.47
Management opportunity
9.12
Compensation
7.63
Firm Culture
7.24
Brand
7.69
Marketability of products
7.13
Layoffs or restructuring
Ability to have influence outside of
fundraising
7.57
8.13
Level of value placed on marketing
7.65
People
Opportunity to grow/build the
marketing effort
Greater opportunities for advancement
Firm's willingness to meet client
expectataions
10.00
7.75
5.93
How would you characterize your current state of mind?
Answer Options
Response Percent
Response Count
Actively looking (unemployed)
5.3%
2
Actively looking (currently employed)
13.2%
5
Not looking but open to considering new opportunities if presented
68.4%
26
Not open to considering new opportunities
13.2%
5
Other (please specify)
0
answered question
38
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 60
Multi-Product Asset Managers – Bank-Owned
If you changed firms, were you offered a (check all that apply):
Answer Options
Response Percent
Response Count
5.0%
2
Slightly more difficult
Moderately more difficult
22.5%
9
Significantly more difficult
40.0%
16
About the same
15.0%
6
Moderately easier
10.0%
4
Significantly easier
7.5%
3
Other (please specify)
0
answered question
40
What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Slightly more difficult
12.5%
5
Moderately more difficult
25.0%
10
Significantly more difficult
10.0%
4
About the same
45.0%
18
Moderately easier
7.5%
3
Significantly easier
0.0%
0
Other (please specify)
0
answered question
40
Percentage of inflows from new vs. existing investors
Firm Type
% Inflows from New
Investors
% Inflows from Existing
Investors
63.42
36.58
Multi-Product Asset Managers – Bank Owned
Capital raising levels per marketer
% of
marketers
that raised
zero capital
Firm Type
Year
Mean
Median
Range
# of marketers
that raised
zero capital
Multi-Product
Asset Manager Bank Owned
2012
400,285,714
250,000,000
0 - 2,000,000,000
2/28
7.14%
Multi-Product
Asset Manager Bank Owned
2013
*YTD
331,678,571
115,000,000
0 - 1,500,000,000
4/29
13.79%
Notes
Minus 1
outlier citing
$5bln
* YTD as of June 2013
Heidrick & Struggles 61
Multi-Product Asset Managers – Bank-Owned
What is your view on the level of difficulty in raising capital today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Increased by less than 10%
5.0%
2
Increased by 11% - 15%
12.5%
5
Increased by 16% - 20%
17.5%
7
Increased by 21% - 25%
5.0%
2
Increased by 26% - 30%
2.5%
1
Increased by 31% - 35%
0.0%
0
Increased by 36% - 40%
7.5%
3
Increased by greater than 40%
7.5%
3
Flat from my 2012 bonus
15.0%
6
Decreased by less than 10%
5.0%
2
Decreased by 11% - 15%
0.0%
0
Decreased by 16% - 20%
2.5%
1
Decreased by 21% - 25%
0.0%
0
Decreased by 26% - 30%
0.0%
0
Decreased by 31% - 35%
0.0%
0
Decreased by 36% - 40%
0.0%
0
Decreased by greater than 40%
0.0%
0
Still too early in the year to estimate
20.0%
8
Other (please specify)
0
answered question
40
What percentage of your cash bonus was deferred in 2012?
Answer Options
Response Percent
Response Count
Less than 10%
54.1%
20
10% - 7019%
13.5%
5
20% - 29%
16.2%
6
30% - 39%
8.1%
3
40% - 49%
2.7%
1
50% - 60%
0.0%
0
60% - 70%
5.4%
2
70%+
0.0%
0
answered question
37
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 62
Multi-Product Asset Managers – Bank-Owned
What are your bonus expectations for 2013 compared to 2012?
Answer Options
Stock options
Response Percent
Response Count
43.5%
10
Participation in the funds
17.4%
4
Equity-like participation
43.5%
10
Sign on bonus
17.4%
4
Retention bonus
13.0%
3
Other (please specify)
4
answered question
23
Which option best characterizes your current bonus structure?
Answer Options
Response Percent
Response Count
Purely formulaic
2.6%
1
Loosely formulaic driven by metrics
15.8%
6
Purely Discretionary
31.6%
12
Part formula / part discretionary
50.0%
19
Other (please specify)
2
answered question
38
Which bonus structure do you prefer?
Answer Options
Response Percent
Response Count
Purely formulaic
17.9%
7
Loosely formulaic driven by metrics
17.9%
7
Purely Discretionary
Part formula / part discretionary
Agnostic
7.7%
3
48.7%
19
7.7%
3
Other (please specify)
0
answered question
39
How are bank owned multi-product asset managers structuring their distribution
efforts?
Mean
Median
Range
20.7
10
2 - 100
11
7
2-60
# of client facing investor relations professionals
12.1
6
2 - 50
# of non - client facing client services
professionals *
12.8
10
1-50
# of sales/fundraising professionals
# of product specialists (for firms with product
specialists)
Heidrick & Struggles 63
Multi-Product Asset Managers – Bank-Owned
What other components comprise your total compensation (check all that apply)??
Answer Options
Response Percent
Response Count
Geographically
56.8%
21
Client Channel
35.1%
13
Product
0.0%
0
No formal alignment
8.1%
3
Other (please specify)
6
answered question
37
Where do product specialists at your firm report in to?
Answer Options
Response Percent
Response Count
Investment team
51.4%
19
Sales team
16.2%
6
Dual Reporting to investment and sales teams
16.2%
6
Not applicable - my firm does not employ product specialists
16.2%
6
Other (please specify)
3
answered question
37
How successful has the product specialist role been within your current firm?
Answered: 39
Highly successful
13%
56%
Moderately successful
Neutral
Not very successful
Not at all successful
N/A - my firm does not
employ product specialists
10%
3%
5%
13%
US: How would you best characterize your current firm’s hiring plans within *US* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
27.0%
10
Opportunistically meeting potential candidates
32.4%
12
Team will remain flat through year-end
35.1%
13
Currently reducing the size of the team
5.4%
2
Other (please specify)
3
answered question
37
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 64
Multi-Product Asset Managers – Bank-Owned
How is coverage among your current sales team (primarily) aligned?
Answer Options
Currently actively recruiting
Response Percent
Response Count
9.4%
3
Opportunistically meeting potential candidates
21.9%
7
Team will remain flat through year-end
40.6%
13
Currently reducing the size of the team
6.3%
2
No current presence or plans to expand in to Asia
21.9%
7
answered question
32
UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the
remainder of 2013?
Answer Options
Currently actively recruiting
Response Percent
Response Count
12.5%
4
Opportunistically meeting potential candidates
18.8%
6
Team will remain flat through year-end
50.0%
16
Currently reducing the size of the team
3.1%
1
No current presence or plans to expand in the UK or Europe
15.6%
5
Other (please specify)
0
answered question
32
Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the
remainder of 2013?
Answer Options
Currently actively recruiting
Response Percent
Response Count
0.0%
0
Opportunistically meeting potential candidates
24.1%
7
Team will remain flat through year-end
44.8%
13
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the Middle East
31.0%
9
Other (please specify)
1
answered question
29
In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?
Answer Options
Response Percent
Response Count
Exporting an existing team member overseas
21.1%
8
Hiring an outside candidate within the local region
76.3%
29
Cover the region from the US
0.0%
0
Not applicable: my current firm does not have a marketing presence
outside of the US
2.6%
1
Other (please specify)
0
answered question
38
Heidrick & Struggles 65
Multi-Product Asset Managers – Bank-Owned
Asia: How would you best characterize your current firm’s hiring plans within *Asia* distribution for the remainder of 2013?
Answer Options
Leveraging industry network
Response Percent
Response Count
68.4%
26
Sourcing investors
7.9%
3
LinkedIn
31.6%
12
Retained executive search
60.5%
23
Contingency executive search
26.3%
10
Professional associations
18.4%
7
Employee referrals
76.3%
29
Internal recruiting function
57.9%
22
Other (please specify)
1
answered question
38
Has your firm used retained search in the past 2 years to hire sales & client services professionals?
Answer Options
Response Percent
Response Count
Yes
50.0%
19
No
21.1%
8
I don't know
28.9%
answered question
11
38
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 66
Multi-Product Asset Managers – Bank-Owned
How does your firm typically recruit sales & client services professionals? (Check all that apply)
Multi-Product Asset Manager – Bank-Owned:
Demographics
Answer Options
Response Percent
Response Count
0.0%
0
Senior Associate
0.0%
0
Vice President
15.6%
7
Associate
Senior Vice President
17.8%
8
Director/Principal
26.7%
12
Managing Director (individual contributor)
13.3%
6
Managing Director (management role)
26.7%
12
Partner
0.0%
0
N/A - Not currently employed
0.0%
0
Other (please specify)
11
answered question
45
How many years of total work experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
3.8%
2
11 - 15
9.6%
5
16 - 20
36.5%
19
21 - 25
21.2%
11
26+
28.8%
15
answered question
52
How many years of asset management distribution experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
19.2%
10
11 - 15
28.8%
15
16 - 20
32.7%
17
21 - 25
15.4%
8
26+
3.8%
2
answered question
52
Heidrick & Struggles 67
Multi-Product Asset Managers – Bank-Owned
What is your current job title?
Answer Options
Response Percent
Response Count
48.9%
22
New York
Connecticut
2.2%
1
Boston
13.3%
6
Chicago
17.8%
8
San Francisco
4.4%
2
Los Angeles
11.1%
5
Minneapolis
0.0%
0
Philadelphia
2.2%
1
Miami
0.0%
0
Houston
0.0%
0
Dallas
0.0%
0
Washington D.C.
0.0%
0
Other (please specify)
9
answered question
45
Which investment products are offered by your current firm (check all that apply)?
Answer Options
Response Percent
Response Count
Long Only Equity
80.8%
42
Long Only Fixed Income
80.8%
42
Hedge Funds
61.5%
32
Private Equity
36.5%
19
Hedge Fund of Funds
50.0%
26
Private Equity Fund of Funds
34.6%
18
Real Estate
57.7%
30
Commodities
40.4%
21
Infrastructure
38.5%
20
Other (please specify)
8
answered question
52
How would you characterize the primary focus of your current role?
Answer Options
Response Percent
Response Count
Sales / Fundraising
52.1%
25
Investor Relations / Client Service (client facing)
4.2%
2
Investor Relations / Client Service (non client facing / support)
0.0%
0
Hybrid Sales & Investor Relations
12.5%
6
Product Specialist
4.2%
2
Consultant Relations
27.1%
13
Other (please specify)
9
answered question
48
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 68
Multi-Product Asset Managers – Bank-Owned
Where do you work?
Answer Options
Response Percent
Response Count
<$200mln
2.0%
1
$200mln - $500mln
0.0%
0
$500mln - $1bln
0.0%
0
$1bln
2.0%
1
$2bln
0.0%
0
$3bln
0.0%
0
$4bln
0.0%
0
$5bln
2.0%
1
$6bln
0.0%
0
$7bln
0.0%
0
$8bln
0.0%
0
$9bln
0.0%
0
$10bln
2.0%
1
$11bln
0.0%
0
$12bln
0.0%
0
$13bln
0.0%
0
$14bln
0.0%
0
$15bln
0.0%
0
$16bln
0.0%
0
$17bln
0.0%
0
$18bln
0.0%
0
$19bln
0.0%
0
$20bln - $29bln
3.9%
2
$30bln - $39bln
5.9%
3
$40bln - $49bln
5.9%
3
$50bln - $59bln
2.0%
1
$60bln+
74.5%
38
Other (please specify)
1
answered question
51
Heidrick & Struggles 69
Multi-Product Asset Managers – Bank-Owned
What are the total assets under management of your current firm?
Hedge Funds
number of positions open globally appears smaller than in the broader asset management industry. For example,
25% of hedge fund employees who participated in our survey reported that their firms were either actively looking or
opportunistically meeting potential candidates in the United States, compared to 40.9% of survey participants overall.
This disparity is likely due to smaller assets under management and team size at hedge fund managers, significant
talent movement over the past several years and, possibly, ongoing performance challenges.
While fundraising remains a major challenge for many hedge funds, inflows in 2013 are looking more positive on
average than they were in 2012, even taking into account some early summer performance issues that caused many
investors to pause and further extend an already lengthy sales cycle. The shift of inflows to the larger hedge funds has
only intensified this year as we have witnessed a flight to safety and continued migration out of fund of funds, leaving
many smaller or nascent funds in a difficult situation. Several marketers reported larger ticket sizes from public funds in
2013 but cited fee pressure from these investors as a challenge. In light of the frequency of movement during the past
three years and the number of firms revamping their distribution efforts, a number of respondents said fundraising
may be up in 2013 because they have gained traction this year after having moved into their current roles and focused
on building infrastructure and momentum in 2011 and 2012.
When we conduct marketing and investor relations searches for hedge fund clients, many hiring managers express the
desire for candidates with an MBA or CFA; yet only 44.7% of respondents have an MBA and only 13.6% have a CFA.
Movement among hedge fund distribution professionals during the past three years was high, with 60% of
respondents reporting they changed firms during that period. Respondents in this category ranked the desire to
build and grow a marketing effort as the top motivator for change; greater opportunities for advancement and
compensation ranked second and third respectively. In contrast, respondents at other types of asset managers ranked
culture and people more highly as reasons to change firms.
We see this “build” characteristic in many of our candidates, particularly the most talented and successful ones. As the
larger hedge funds continue to expand their teams, we often hear from candidates that “it’s getting crowded” and
they feel like they have less ability to build, create, and influence. It pays for hedge fund managers to be mindful of
this motivating character trait and to provide those who possess it with suitable opportunities wherever possible—for
example, by leveraging their insight into new product development or assigning a team captain to a new product.
We found that hedge fund marketing and investor relations professionals have an attitude toward changing firms that
is similar to their broader industry peers, with most respondents (53.5%) describing themselves as “not looking but
open to considering new opportunities.” We took a closer look at how movement affected compensation and found
that 56.2% of respondents who reported moving within the past three years saw an increase in total compensation,
with the top 10.9% enjoying a 40%+ increase. About one-quarter saw their compensation remain flat and 15.1%
actually saw a decrease. When joining a new firm, 50% received a minimum bonus floor and 15% a make-whole bonus,
above the norm compared to their asset management peers in the industry as a whole.
Nearly 62% of respondents said capital raising is more difficult today compared to three years ago, with 10.8% viewing
it the same and 17.6% as easier. Regarding the retention of capital, 54% view it as more difficult, 35.1% as about the
same and 10.9% as easier. Participants reported an average of 59.7% of inflows coming from new investors and 40.3%
from existing investors. The median amount of capital raised YTD in 2013 is $150 million per marketer, compared to
$100 million in 2012.
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 70
Hedge Funds
Midway through 2013, hedge funds remain an active recruiting market for distribution professionals, although the
too early in the year to tell, 19.2% expecting bonuses to remain flat and 4.1% expecting a decrease. The majority
of respondents (65.3%) are paid on a purely discretionary basis (compared to 44.4% across the broader asset
management industry) but only 21% prefer that structure. Nearly half prefer to be paid on a part formula/part
discretionary basis—something firms might keep in mind when trying to attract talent. Deferred compensation levels
are low among hedge funds, with 65.8% of respondents having less than 10% of their 2012 cash bonus deferred.
Hedge funds differ from the rest of the asset management industry in that most firms (at least 71.2%) do not employ
product specialists and many do not employ non-client-facing investor relations professionals. Additionally, a higher
percentage of respondents in this category described their roles as hybrid sales and investor relations—different
from traditional asset management, which tends to be much more segmented. Among firms that do employ product
specialists, the majority report to the sales team and the role is viewed as successful within the firm.
In measuring a distribution professional’s individual performance beyond capital raising and retention, hedge funds
view fund performance as more important than other asset management firms. The top four performance metrics are:
1. Strategic/firm building
2. Fund performance
3. Team collaboration
4. Activity
Finally, the global hiring outlook for hedge fund distribution seems less robust than it is in the asset management
industry overall. As noted above, only 25% of respondents working at hedge funds said their firms were actively
recruiting or opportunistically meeting candidates in the United States, compared with 40.9% for the entire industry.
Only 6.1% said their firms were actively recruiting or opportunistically meeting candidates in Asia, compared to 24.1%
of the industry overall, and 66.2% said their firms have no presence or plans to expand in Asia, compared to the
broader industry at 48.1%. In the UK/Europe we are seeing the same trend, with just 12.4% saying their firms were
actively recruiting or opportunistically meeting candidates compared with an industry average of 21%. In Europe,
hedge funds face the additional pressure of an increasingly challenging regulatory environment. In the Middle East,
no respondents said their firms were actively interviewing and just 4.8% reported they were opportunistically meeting
candidates, while 11.4% of asset managers overall were actively interviewing or opportunistically meeting candidates
in that region.
The overall asset management industry, with a deeper presence outside the U.S. than most hedge funds, also seems
more confident that hiring an outside candidate from the local region is the most effective way to expand marketing
efforts overseas. (In subsequent studies, we will look at the Americas more broadly.)
When recruiting sales and investor relations talent, hedge fund respondents reported only slightly lower rates (46.3%)
of partnering with retained executive search firms than the broader asset management industry (51.9%).
There are so many nuances and variables that affect hedge fund distribution efforts—strategy, performance, assets
under management, ownership structure, sophistication of the sales and investor relations team, culture, etc. We hope
to explore them further in future reports.
Heidrick & Struggles 71
Hedge Funds
Bonus expectations are quite mixed, with 56.2% of respondents expecting an increase in 2013, 20.5% saying it’s
Answer Options
Bachelor's Degree
Response Percent
Response Count
47.9%
45
Master's Degree (non MBA)
6.4%
6
MBA
44.7%
42
Ph.D.
1.1%
answered question
1
94
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
60.0%
45
No
40.0%
30
answered question
75
If yes, by what percentage did your total compensation change?
Answer Options
Response Percent
Response Count
Remained Flat
26.1%
12
Increased by 1% - 9%
6.5%
3
Increased by 10% - 19%
6.5%
3
Increased by 20% - 29%
21.7%
10
Increased by 30% - 39%
13.0%
6
Increased by 40%+
10.9%
5
Decreased by 1% - 9%
0.0%
0
Decreased by 10% - 19%
4.3%
2
Decreased by 20% - 29%
4.3%
2
Decreased by 30% - 39%
4.3%
2
Decreased by 40%+
2.2%
1
answered question
46
If you changed firms, were you offered a (check all that apply):
Answer Options
Response Percent
Response Count
Sign-on bonus
25.0%
10
Buy out of equity
12.5%
5
Make whole bonus (100% of anticipated bonus at previous firm)
15.0%
6
Minimum bonus floor (% of anticipated bonus at previous firm)
50.0%
20
Not applicable
30.0%
12
Other (please specify)
1
answered question
40
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 72
Hedge Funds
What is the highest level of education you have completed
Answered: 44
Management opportunity
6.83
Compensation
8.90
Firm Culture
8.80
Brand
6.34
8.49
Marketability of products
7.13
Layoffs or restructuring
Ability to have influence outside of
fundraising
Level of value placed on marketing
6.86
6.34
8.88
People
Opportunity to grow/build the
marketing effort
Greater opportunities for advancement
Firm's willingness to meet client
expectataions
9.92
9.03
6.18
How would you characterize your current state of mind?
Answer Options
Actively looking (unemployed)
Response Percent
Response Count
2.8%
2
Actively looking (currently employed)
15.5%
11
Not looking but open to considering new opportunities if presented
53.5%
38
Not open to considering new opportunities
28.2%
20
Other (please specify)
2
answered question
71
What is your view on the level of difficulty in raising capital today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Slightly more difficult
10.8%
8
Moderately more difficult
29.7%
22
Significantly more difficult
31.1%
23
About the same
10.8%
8
Moderately easier
14.9%
11
Significantly easier
2.7%
2
Other (please specify)
1
answered question
74
Heidrick & Struggles 73
Hedge Funds
If you changed firms in the past 3 years, please rank your primary motivation(s) for
change:
Answer Options
Slightly more difficult
Response Percent
Response Count
16.2%
12
Moderately more difficult
21.6%
16
Significantly more difficult
16.2%
12
About the same
35.1%
26
Moderately easier
9.5%
7
Significantly easier
1.4%
1
Other (please specify)
1
answered question
74
Capital raising levels per marketer
# of marketers
that raised
zero capital
% of
marketers
that raised
zero capital
Firm Type
Year
Mean
Median
Range
Hedge Fund
2012
$302,525,000
$100,000,000
$0 $5,000,000,000
12/61
19.67%
Hedge Fund
2013
*YTD
$315,546,875
$150,000,000
$0 $2,000,000,000
9/64
14.06%
Notes
* YTD as of June 2013
What are your bonus expectations for 2013 compared to 2012?
Answer Options
Response Percent
Response Count
Increased by less than 10%
11.0%
8
Increased by 11% - 15%
9.6%
7
Increased by 16% - 20%
4.1%
3
Increased by 21% - 25%
12.3%
9
Increased by 26% - 30%
1.4%
1
Increased by 31% - 35%
4.1%
3
Increased by 36% - 40%
8.2%
6
Increased by greater than 40%
5.5%
4
Flat from my 2012 bonus
19.2%
14
Decreased by less than 10%
0.0%
0
Decreased by 11% - 15%
0.0%
0
Decreased by 16% - 20%
0.0%
0
Decreased by 21% - 25%
0.0%
0
Decreased by 26% - 30%
0.0%
0
Decreased by 31% - 35%
1.4%
1
Decreased by 36% - 40%
0.0%
0
Decreased by greater than 40%
2.7%
2
Still too early in the year to estimate
20.5%
15
Other (please specify)
3
answered question
73
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 74
Hedge Funds
What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?
Answer Options
Response Percent
Response Count
65.8%
48
Less than 10%
10% - $19%
8.2%
6
20% - 29%
16.4%
12
30% - 39%
4.1%
3
40% - 49%
1.4%
1
50% - 60%
4.1%
3
60% - 70%
0.0%
0
70%+
0.0%
0
answered question
73
What other components comprise your total compensation (check all that apply)??
Answer Options
Response Percent
Response Count
Stock options
10.3%
3
Participation in the funds
41.4%
12
Equity-like participation
37.9%
11
Sign on bonus
13.8%
4
Retention bonus
6.9%
2
Other (please specify)
4
answered question
29
Which option best characterizes your current bonus structure?
Answer Options
Response Percent
Response Count
Purely formulaic
5.6%
4
Loosely formulaic driven by metrics
6.9%
5
Purely Discretionary
65.3%
47
Part formula / part discretionary
22.2%
16
Other (please specify)
2
answered question
72
Which bonus structure do you prefer?
Answer Options
Response Percent
Response Count
Purely formulaic
5.6%
4
Loosely formulaic driven by metrics
18.3%
13
Purely Discretionary
21.1%
15
Part formula / part discretionary
47.9%
34
Agnostic
7.0%
5
Other (please specify)
1
answered question
71
Heidrick & Struggles 75
Hedge Funds
What percentage of your cash bonus was deferred in 2012?
Mean
Median
Range
# of sales/fundraising professionals
3.7
2
1 - 25
# of product specialists (for firms with product
specialists) 1
1.7
1
1-8
# of client facing investor relations professionals 2
3.1
2
1-16
# of non - client facing client services professionals 3
3.3
2
1-12
(1) most hedge funds do not employ product specialists
(2) there is significant crossover with sales/IR combined in hybrid roles
(3) 26% of respondents said their firms do not employ any non-client-facing client services professionals
How is coverage among your current sales team (primarily) aligned?
Answer Options
Response Percent
Response Count
Geographically
32.9%
24
Client Channel
13.7%
10
Product
4.1%
3
49.3%
36
No formal alignment
Other (please specify)
3
answered question
73
Where do product specialists at your firm report in to?
Answer Options
Response Percent
Response Count
Investment team
4.1%
3
Sales team
17.8%
13
Dual Reporting to investment and sales teams
6.8%
5
Not applicable - my firm does not employ product specialists
71.2%
52
Other (please specify)
2
answered question
73
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 76
Hedge Funds
How are hedge funds structuring their distribution teams?
Hedge Funds
How successful has the product specialist been within your current firm?
Answered: 72
13%
Highly successful
Moderately successful
Neutral
Not very successful
Not at all successful
11%
4%
1%
0%
N/A - my firm does not
employ product specialists
71%
US: How would you best characterize your current firm’s hiring plans within *US* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
10.3%
7
Opportunistically meeting potential candidates
14.7%
10
Team will remain flat through year-end
67.6%
46
Currently reducing the size of the team
7.4%
5
Other (please specify)
1
answered question
68
Asia: How would you best characterize your current firm’s hiring plans within *Asia* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
1.5%
1
Opportunistically meeting potential candidates
4.6%
3
Team will remain flat through year-end
26.2%
17
Currently reducing the size of the team
1.5%
1
No current presence or plans to expand in to Asia
66.2%
43
answered question
65
UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
6.2%
4
Opportunistically meeting potential candidates
6.2%
4
Team will remain flat through year-end
32.3%
21
Currently reducing the size of the team
1.5%
1
No current presence or plans to expand in the UK or Europe
53.8%
35
Other (please specify)
1
answered question
65
Heidrick & Struggles 77
Answer Options
Response Percent
Response Count
Currently actively recruiting
0.0%
0
Opportunistically meeting potential candidates
4.8%
3
Team will remain flat through year-end
20.6%
13
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the Middle East
74.6%
47
Other (please specify)
1
answered question
63
In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?
Answer Options
Response Percent
Response Count
16.7%
11
Hiring an outside candidate within the local region
37.9%
25
Cover the region from the US
21.2%
14
Not applicable: my current firm does not have a marketing presence
outside of the US
24.2%
16
Exporting an existing team member overseas
Other (please specify)
5
answered question
66
How does your firm typically recruit sales & client services professionals? (check all that apply)
Answer Options
Response Percent
Response Count
Leveraging industry network
65.7%
44
Sourcing investors
16.4%
11
LinkedIn
6.0%
4
Retained executive search
46.3%
31
Contingency executive search
20.9%
14
Professional associations
10.4%
7
Employee referrals
53.7%
36
Internal recruiting function
19.4%
13
Other (please specify)
0
answered question
160
Has your firm used retained search in the past 2 years to hire sales & client services professionals?
Answer Options
Response Percent
Response Count
Yes
37.7%
26
No
55.1%
38
I don't know
7.2%
answered question
5
69
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 78
Hedge Funds
Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the
remainder of 2013?
Hedge Funds: Demographics
Answer Options
Response Percent
Response Count
0.0%
0
Senior Associate
1.1%
1
Vice President
6.7%
6
Associate
Senior Vice President
6.7%
6
Director/Principal
31.5%
28
Managing Director (individual contributor)
15.7%
14
Managing Director (management role)
23.6%
21
Partner
11.2%
10
N/A - Not currently employed
3.4%
3
Other (please specify)
8
answered question
89
How many years of total work experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
6.3%
6
11 - 15
30.5%
29
16 - 20
26.3%
25
21 - 25
25.3%
24
26+
11.6%
11
answered question
95
How many years of asset management distribution experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
35.1%
33
11 - 15
38.3%
36
16 - 20
17.0%
16
21 - 25
9.6%
9
26+
0.0%
0
answered question
94
Heidrick & Struggles 79
Hedge Funds
What is your current job title?
Answer Options
Response Percent
Response Count
New York
72.8%
67
Connecticut
10.9%
10
Boston
1.1%
1
Chicago
6.5%
6
San Francisco
4.3%
4
Los Angeles
2.2%
2
Minneapolis
1.1%
1
Philadelphia
0.0%
0
Miami
0.0%
0
Houston
0.0%
0
Dallas
1.1%
1
Washington D.C.
0.0%
0
Other (please specify)
3
answered question
92
Which investment products are offered by your current firm (check all that apply)?
Answer Options
Response Percent
Response Count
Long Only Equity
8.7%
8
Long Only Fixed Income
10.9%
10
Hedge Funds
96.7%
89
Private Equity
18.5%
17
Hedge Fund of Funds
8.7%
8
Private Equity Fund of Funds
1.1%
1
Real Estate
9.8%
9
Commodities
6.5%
6
Infrastructure
1.1%
1
Other (please specify)
5
answered question
92
How would you characterize the primary focus of your current role?
Answer Options
Response Percent
Response Count
Sales / Fundraising
45.7%
42
Investor Relations / Client Service (client facing)
12.0%
11
Investor Relations / Client Service (non client facing / support)
0.0%
0
Hybrid Sales & Investor Relations
35.9%
33
Product Specialist
2.2%
2
Consultant Relations
4.3%
4
Other (please specify)
6
answered question
92
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 80
Hedge Funds
Where do you work?
Answer Options
Long short equity
Long bias
Response Percent
Response Count
23.3%
21
1.1%
1
Credit
24.4%
22
Event driven
14.4%
13
1.1%
1
Global macro
13.3%
12
Relative Value
3.3%
3
Arbitrage
CTA/Managed futures
4.4%
4
Multi-strategy
14.4%
13
Other (please specify)
10
answered question
90
Heidrick & Struggles 81
Hedge Funds
If your firm is a hedge fund, what is its primary investment strategy?
Answer Options
Response Percent
Response Count
<$200mln
9.6%
9
$200mln - $500mln
16.0%
15
$500mln - $1bln
3.2%
3
$1bln
8.5%
8
$2bln
8.5%
8
$3bln
6.4%
6
$4bln
4.3%
4
$5bln
4.3%
4
$6bln
3.2%
3
$7bln
6.4%
6
$8bln
0.0%
0
$9bln
2.1%
2
$10bln
5.3%
5
$11bln
1.1%
1
$12bln
7.4%
7
$13bln
1.1%
1
$14bln
0.0%
0
$15bln
2.1%
2
$16bln
2.1%
2
$17bln
0.0%
0
$18bln
2.1%
2
$19bln
1.1%
1
$20bln - $29bln
2.1%
2
$30bln - $39bln
1.1%
1
$40bln - $49bln
1.1%
1
$50bln - $59bln
0.0%
0
$60bln+
2.1%
2
Other (please specify)
0
answered question
94
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 82
Hedge Funds
What are the total assets under management of your current firm?
Private Equity
last fundraising efforts took place pre-2008, have recently seen or are about to experience a seismic shift in their
approach to raising assets, since it now takes longer to raise funds and pre-fundraising is a much more important part
of the process. Fewer clients are “re-upping” and many are allocating less funding than in recent years. As a result,
there is a need to diversify into different channels and geographies to meet fundraising targets and reduce the risk of
dependency on one or two client channels for future fundraises.
As a result, it is now common practice for private equity firms to provide a high level of service to existing clients,
providing more contact, portfolio information and greater access to the firm’s senior management team. We have
therefore seen client relationship management become fundamentally more important in the last several years.
Findings from our survey of distribution professionals suggest that private equity firms are hiring talent to cope
with the more complex nature of fundraising and investor relations. As the demand for talent increases, we would
consequently expect salaries to rise as well.
(Please note: Throughout this section we refer to the different types of client team professionals at private equity
firms—marketers, business developers, fundraisers, client relations managers—as investor relations (IR) professionals.)
A relatively small sample of 29 investor relations professionals employed by private equity firms responded to our
survey. They range from vice president to partner. Firm assets range from $1 billion to more than $60 billion. The firms
are located across the United States, with a large proportion headquartered in New York. Most of them prefer to hire
investor relations professionals with advanced degrees, and two-thirds of respondents reported having advanced
degrees.
Despite lengthy private equity fundraising cycles, steady economic recovery and more emphasis on long-term
compensation, 40% of our respondents changed firms during the past three years, supporting our view that there
is a high level of demand for investor relations professionals. Almost 60% of those who moved had an increase in
compensation, with 25% of them receiving an increase of 30% to 40%. For one third of those who moved, however,
compensation remained flat. This discrepancy is likely explained by the fact that some of the respondents were actively
looking to move or were unemployed, while others were “poached” by their new employer.
Of those who changed firms, almost 60% received some type of sign-on bonus. Approximately 28% were offered
minimum bonus floors while none received absolute guarantees.
When considering the reasons for changing jobs, the top motivator is people, followed by opportunity to grow and
build the marketing function in second place and layoffs/restructuring coming in third. A very close fourth on the list
of motivators is culture, which arguably can be tied to the people category, further strengthening the notion that a
firm’s culture drives motivation. Other high-ranking motivators include marketability of products and the level of value
placed on the marketing function, both of which we have found to be significant factors when IR professionals are
deciding which firm to join. Although many people assume that compensation is a strong motivator, private equity
respondents ranked it sixth.
Apart from fundraising and client retention, the performance metrics that IR professionals said are most commonly
used are team collaboration, firm profitability and consultant ratings. These findings magnify the importance of culture
and indicate the growing importance of actively covering consultants.
Heidrick & Struggles 83
Private Equity
The private equity industry has experienced a transformation in fundraising and investor relations. Many firms, whose
and approximately 20% said they were actively looking while employed. While our small sample size may have skewed
the data, we have found that people are generally open to talking about new opportunities.
About 48% of respondents think it is more difficult to raise capital than it was three years ago, while 24% think it’s
easier and 28% think it is about the same. The perceived difficulty of raising assets may be a significant reason why so
many respondents changed firms in the past three years and why so many are open to considering career moves.
Respondents said 60% of capital inflows are coming from new investors and 40% from current clients. While the figures
may vary significantly depending on fund performance, on average 40% is a large proportion and demonstrates the
importance of providing high-level client service during non-fundraising periods.
Assets raised per IR professional appear to be up significantly from 2012 in the first six months of 2013. This may be
explained by a number of factors: more investors are putting money to work in private equity (a shift in asset classes);
more private equity firms are raising money this year; private equity firms have more funds in the market. There is also
the possibility that institutional investors have greater liquidity than in previous years. It should be noted that, while
the mean level of assets raised has increased, a higher percentage of IR professionals have raised zero capital in 2013
compared to 2012. While some firms may not be actively fundraising, the more likely explanation is that more funds are
under-performing.
Compensation in 2013 appears to be up from 2012, with 65% of respondents seeing an increase and 35% reporting
an increase of 20% or more. Approximately 80% of respondents said less than 10% of their cash compensation was
deferred and 10% had 20-29% of their cash compensation deferred.
Approximately 50% of respondents said they receive carried interest. Carry, as a percentage of total compensation,
can vary widely, from 0%-75%, with higher percentages noted among more senior level professionals. The typical
range is somewhere between 3%-40%. Although we know that an increasingly higher proportion of investor relations
professionals are receiving carried interest, it will be interesting to see how this trend evolves in years to come,
particularly as firms expand their product offerings and these programs become more complex to manage.
Slightly more than 50% of respondents receive equity participation or stock options. About 45% said their bonus
structure is part formulaic/part discretionary, while 35% have a purely discretionary structure and just 10% have a
purely formulaic structure. At the same time, 45% of respondents favor a part formulaic/part discretionary bonus
structure, which suggests that IR professionals want to be rewarded for performance but also for harder-to-quantify
factors such as training, building an IR function, branding, improving marketing materials, innovative ideas for client
relationship management and extensive premarketing campaigns.
Our survey suggests that IR teams are clearly split between geographical coverage models and no formal alignment.
Only 8% of respondents said IR teams are aligned by client channel, distinguishing private equity firms from typical
asset managers and hedge funds, where more teams are aligned by client channel.
About 40% of respondents said their firms have product specialists, half of whom report to the investment teams and
half to the sales teams. Of those who work at firms with product specialists, approximately 50% think the product
specialist role is moderately successful and approximately 20% think it is highly successful. Almost 30% think the
product specialist role is neither successful nor unsuccessful, suggesting that some IR professionals are unfamiliar with
the product specialist role or that it may be new to their firms.
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 84
Private Equity
A startling 71% of respondents said they are opportunistic when it comes to considering other career opportunities
States, while the other half said they are not looking to recruit additional members to the IR teams. On the international
front, there seems to be a relatively low level of active recruiting currently taking place in Asia and Europe and it looks
like most firms are going to maintain their existing team size. Two-thirds of respondents said the best way to handle
overseas private equity investor relations coverage is to hire an outside candidate within the local region, while just
under one-third said the most effective strategy is to export an existing team member overseas.
In summary, there appears to be increased demand for investor relations talent in the U.S. as private equity firms have
increasingly realized the importance of the investor relations function. This conclusion is supported by the fact that
40% of respondents changed firms in the past three years and that compensation is trending up. And at a time when
demand for talent is high, investor relations professionals are very open to considering career moves and exploring
employment opportunities.
What is the highest level of education you have completed?
Answer Options
Bachelor's Degree
Response Percent
Response Count
34.5%
10
Master's Degree (non MBA)
20.7%
6
MBA
34.5%
10
Ph.D.
10.3%
answered question
3
29
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
40.0%
10
No
60.0%
15
answered question
25
If yes, by what percentage did your total compensation change?
Answer Options
Response Percent
Response Count
Remained Flat
33.3%
4
Increased by 1% - 9%
25.0%
3
Increased by 10% - 19%
8.3%
1
Increased by 20% - 29%
0.0%
0
Increased by 30% - 39%
16.7%
2
Increased by 40%+
8.3%
1
Decreased by 1% - 9%
0.0%
0
Decreased by 10% - 19%
0.0%
0
Decreased by 20% - 29%
0.0%
0
Decreased by 30% - 39%
0.0%
0
Decreased by 40%+
8.3%
answered question
1
12
Heidrick & Struggles 85
Private Equity
Half of the respondents said their firms are actively recruiting or are open to meeting with potential hires in the United
Answer Options
Response Percent
Response Count
Sign-on bonus
57.1%
4
Buy out of equity
14.3%
1
Make whole bonus (100% of anticipated bonus at previous firm)
0.0%
0
Minimum bonus floor (% of anticipated bonus at previous firm)
28.6%
2
Not applicable
28.6%
2
Other (please specify)
0
answered question
7
If you changed firms in the past 3 years, please rank your primary motivation(s) for
change:
Answered: 9
5.20
Management opportunity
8.14
Compensation
9.29
Firm Culture
7.43
Brand
8.86
Marketability of products
9.60
Layoffs or restructuring
Ability to have influence outside of
fundraising
7.43
8.00
Level of value placed on marketing
People
10.00
Opportunity to grow/build the
marketing effort
9.88
Greater opportunities for advancement
Firm's willingness to meet client
expectataions
6.57
3.83
How would you characterize your current state of mind?
Answer Options
Response Percent
Response Count
Actively looking (unemployed)
0.0%
0
Actively looking (currently employed)
19.0%
4
Not looking but open to considering new opportunities if presented
71.4%
15
Not open to considering new opportunities
9.5%
2
Other (please specify)
4
answered question
21
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 86
Private Equity
If you changed firms, were you offered a (check all that apply):
Answer Options
Response Percent
Response Count
8.0%
2
Moderately more difficult
16.0%
4
Significantly more difficult
24.0%
6
About the same
28.0%
7
Moderately easier
24.0%
6
Significantly easier
0.0%
0
Slightly more difficult
Other (please specify)
1
answered question
25
What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Slightly more difficult
8.3%
2
Moderately more difficult
20.8%
5
Significantly more difficult
16.7%
4
About the same
50.0%
12
Moderately easier
4.2%
1
Significantly easier
0.0%
0
Other (please specify)
1
answered question
24
Percentage of inflows from new vs. existing investors
Firm Type
% Inflows from New
Investors
% Inflows from Existing
Investors
59.55
40.45
Private Equity
Capital raising levels per marketer
% of
marketers
that raised
zero capital
Firm Type
Year
Mean
Median
Range
# of marketers
that raised
zero capital
Private Equity
2012
$335,000,000
$115,000,000
$0 - $800,000,000
3/15
20.00%
Minus 1
outlier citing
4bln
Private Equity
2013
*YTD
$725,166,666
$275,000,000
$0 $5,000,000,000
5/18
27.77%
Four
marketers up
over $1bln
Notes
* YTD as of June 2013
Heidrick & Struggles 87
Private Equity
What is your view on the level of difficulty in raising capital today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Increased by less than 10%
10.0%
2
Increased by 11% - 15%
10.0%
2
Increased by 16% - 20%
10.0%
2
Increased by 21% - 25%
15.0%
3
Increased by 26% - 30%
5.0%
1
Increased by 31% - 35%
0.0%
0
Increased by 36% - 40%
10.0%
2
Increased by greater than 40%
5.0%
1
Flat from my 2012 bonus
20.0%
4
Decreased by less than 10%
0.0%
0
Decreased by 11% - 15%
0.0%
0
Decreased by 16% - 20%
0.0%
0
Decreased by 21% - 25%
0.0%
0
Decreased by 26% - 30%
0.0%
0
Decreased by 31% - 35%
0.0%
0
Decreased by 36% - 40%
0.0%
0
Decreased by greater than 40%
0.0%
0
Still too early in the year to estimate
15.0%
3
Other (please specify)
0
answered question
20
What percentage of your cash bonus was deferred in 2012?
Answer Options
Response Percent
Response Count
Less than 10%
81.8%
18
10% - 19%
4.5%
1
20% - 29%
9.1%
2
30% - 39%
0.0%
0
40% - 49%
4.5%
1
50% - 60%
0.0%
0
60% - 70%
0.0%
0
70%+
0.0%
0
answered question
22
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 88
Private Equity
What are your bonus expectations for 2013 compared to 2012?
Answer Options
Response Percent
Response Count
23.1%
3
Participation in the funds
76.9%
10
Equity-like participation
30.8%
4
Sign on bonus
7.7%
1
Retention bonus
7.7%
1
Stock options
Other (please specify)
0
answered question
13
Which option best characterizes your current bonus structure?
Answer Options
Response Percent
Response Count
Purely formulaic
10.0%
2
Loosely formulaic driven by metrics
10.0%
2
Purely Discretionary
35.0%
7
Part formula / part discretionary
45.0%
9
Other (please specify)
0
answered question
20
Which bonus structure do you prefer?
Answer Options
Response Percent
Response Count
Purely formulaic
15.0%
3
Loosely formulaic driven by metrics
5.0%
1
Purely Discretionary
20.0%
4
Part formula / part discretionary
45.0%
9
Agnostic
15.0%
3
Other (please specify)
1
answered question
20
How are private equity firms structuring their distribution efforts?
Mean
Median
Range
# of sales/fundraising professionals (1)
7.2
4
1-20
# of product specialists (for firms with product
specialists)
6.2
4
3-25
# of client facing investor relations professionals
5.5
4
1-22
# of non - client facing client services
professionals (2)
8.3
5
1 - 48
(1) Not counting one outlier who cited 50 sales professionals
(2) Not counting two outliers who cited 150 and 275 non-client facing client services professionals
Heidrick & Struggles 89
Private Equity
What other components comprise your total compensation (check all that apply)??
Answer Options
Response Percent
Response Count
Geographically
48.0%
12
Client Channel
8.0%
2
Product
0.0%
0
No formal alignment
44.0%
11
Other (please specify)
1
answered question
25
Where do product specialists at your firm report in to?
Answer Options
Response Percent
Response Count
Investment team
20.8%
5
Sales team
20.8%
5
Dual Reporting to investment and sales teams
8.3%
2
Not applicable - my firm does not employ product specialists
50.0%
12
Other (please specify)
1
answered question
24
How successful has the product specialist been within your current firm?
Answered: 22
14%
Highly successful
23%
Moderately successful
18%
Neutral
Not very successful
0%
Not at all successful
0%
N/A - my firm does not
employ product specialists
45%
US: How would you best characterize your current firm’s hiring plans within *US* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
20.0%
4
Opportunistically meeting potential candidates
30.0%
6
Team will remain flat through year-end
50.0%
10
Currently reducing the size of the team
0.0%
0
Other (please specify)
0
answered question
20
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 90
Private Equity
How is coverage among your current sales team (primarily) aligned?
Answer Options
Response Percent
Response Count
Currently actively recruiting
6.3%
1
Opportunistically meeting potential candidates
12.5%
2
Team will remain flat through year-end
31.3%
5
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in to Asia
50.0%
8
answered question
16
UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
5.6%
1
Opportunistically meeting potential candidates
5.6%
1
Team will remain flat through year-end
44.4%
8
Currently reducing the size of the team
5.6%
1
No current presence or plans to expand in the UK or Europe
38.9%
7
Currently actively recruiting
Other (please specify)
0
answered question
18
Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
6.3%
1
Opportunistically meeting potential candidates
12.5%
2
Team will remain flat through year-end
12.5%
2
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the Middle East
68.8%
11
Other (please specify)
0
answered question
16
In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?
Answer Options
Response Percent
Response Count
Exporting an existing team member overseas
27.8%
5
Hiring an outside candidate within the local region
66.7%
12
Cover the region from the US
5.6%
1
Not applicable: my current firm does not have a marketing presence
outside of the US
0.0%
0
Other (please specify)
0
answered question
18
Heidrick & Struggles 91
Private Equity
Asia: How would you best characterize your current firm’s hiring plans within *Asia* distribution for the remainder of 2013?
Answer Options
Leveraging industry network
Response Percent
Response Count
47.1%
8
Sourcing investors
0.0%
0
LinkedIn
17.6%
3
Retained executive search
47.1%
8
Contingency executive search
35.3%
6
Professional associations
0.0%
0
Employee referrals
52.9%
9
Internal recruiting function
17.6%
3
Other (please specify)
0
answered question
17
Has your firm used retained search in the past 2 years to hire sales & client services professionals?
Answer Options
Response Percent
Response Count
Yes
33.3%
7
No
42.9%
9
I don't know
23.8%
answered question
5
21
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 92
Private Equity
How does your firm typically recruit sales & client services professionals? (Check all that apply)
Private Equity: Demographics
Answer Options
Response Percent
Response Count
0.0%
0
Senior Associate
0.0%
0
Vice President
10.7%
3
Senior Vice President
3.6%
1
Director/Principal
25.0%
7
Managing Director (individual contributor)
28.6%
8
Managing Director (management role)
14.3%
4
Partner
17.9%
5
N/A - Not currently employed
0.0%
0
Associate
Other (please specify)
1
answered question
28
How many years of total work experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
3.4%
1
11 - 15
37.9%
11
16 - 20
27.6%
8
21 - 25
17.2%
5
26+
13.8%
4
answered question
29
How many years of asset management distribution experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
41.4%
12
11 - 15
34.5%
10
16 - 20
17.2%
5
21 - 25
6.9%
2
26+
0.0%
0
answered question
29
Heidrick & Struggles 93
Private Equity
What is your current job title?
Answer Options
Response Percent
Response Count
New York
57.7%
15
Connecticut
3.8%
1
Boston
7.7%
2
Chicago
3.8%
1
San Francisco
3.8%
1
Los Angeles
7.7%
2
Minneapolis
0.0%
0
Philadelphia
3.8%
1
Miami
0.0%
0
Houston
0.0%
0
Dallas
3.8%
1
Washington D.C.
7.7%
2
Other (please specify)
2
answered question
26
Which investment products are offered by your current firm (check all that apply)?
Answer Options
Response Percent
Response Count
Long Only Equity
10.7%
3
Long Only Fixed Income
7.1%
2
Hedge Funds
28.6%
8
Private Equity
89.3%
25
Hedge Fund of Funds
10.7%
3
Private Equity Fund of Funds
10.7%
3
Real Estate
32.1%
9
Commodities
3.6%
1
Infrastructure
32.1%
9
Other (please specify)
5
answered question
28
How would you characterize the primary focus of your current role?
Answer Options
Response Percent
Response Count
Sales / Fundraising
37.5%
9
Investor Relations / Client Service (client facing)
20.8%
5
Investor Relations / Client Service (non client facing / support)
4.2%
1
Hybrid Sales & Investor Relations
20.8%
5
Product Specialist
8.3%
2
Consultant Relations
8.3%
2
Other (please specify)
6
answered question
24
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 94
Private Equity
Where do you work?
Answer Options
Response Percent
Response Count
10.3%
3
$200mln - $500mln
6.9%
2
$500mln - $1bln
0.0%
0
$1bln
0.0%
0
$2bln
6.9%
2
$3bln
3.4%
1
$4bln
3.4%
1
$5bln
0.0%
0
$6bln
6.9%
2
$7bln
3.4%
1
$8bln
0.0%
0
$9bln
6.9%
2
$10bln
0.0%
0
$11bln
3.4%
1
$12bln
3.4%
1
$13bln
3.4%
1
$14bln
0.0%
0
$15bln
3.4%
1
$16bln
0.0%
0
$17bln
3.4%
1
$18bln
3.4%
1
$19bln
0.0%
0
$20bln - $29bln
6.9%
2
$30bln - $39bln
3.4%
1
$40bln - $49bln
3.4%
1
$50bln - $59bln
3.4%
1
$60bln+
13.8%
4
<$200mln
Other (please specify)
1
answered question
29
Heidrick & Struggles 95
Private Equity
What are the total assets under management of your current firm?
Real Estate
managers, several interesting themes emerged from our study of this segment of the industry.
Even though there is higher reported confidence in the strategy among institutional investors (according to the
research firm Preqin), the fundraising environment for private real estate continues to prove challenging. Launching
a new fund is particularly difficult with so many funds already in the market that are capable of demonstrating
performance numbers through up and down markets. However, 2013 is trending positively, with some very welcome
momentum for a group of fundraising professionals who have suffered their fair share of battle fatigue in recent years.
A higher percentage of the talent pool focused on real estate hold advanced degrees than their broader asset
management peers, with 73.9% holding an MBA or master’s degree compared to 56.5% of participants overall.
Movement among this group has been very high, with 66% reporting they changed employers within the past three
years. The majority of those who moved saw a compensation increase, with 30% remaining flat and 10% experiencing
a decrease. When accepting a new position, 30% received a make-whole bonus, which was high compared to an
industry average of 14%; sign-on bonuses were less common. Unlike any other asset management category we
examined, real estate distribution professionals ranked compensation as the top motivator for changing firms. The
opportunity to grow and build a marketing effort ranked second and firm culture ranked third. Currently employed
respondents reported higher rates of “actively looking” when asked to describe their current state of mind—33.3%
compared to the industry average of 17.8%.
Regarding capital raising and retention, just 26.7% of respondents view capital raising as more difficult today
compared to three years ago. That is quite an optimistic view compared to the broader industry, where 61.53% said
capital raising is more difficult. Two-thirds of real estate respondents view the difficulty in retaining capital as “about
the same,” compared to 48.5% of the industry overall. This optimism is likely a reflection of increasing institutional
investor interest in specialized fixed-income products. The percentage of inflows coming from new investors was
75.9%, the highest of the firm types we looked at; the industry average was 65.48%. The median amount of capital
raised per marketer was lower than the broader industry for 2012 ($100 million) and 2013 (projected to be $162.5
million for the year), and the percentage of marketers who reported raising zero capital in those calendar years was the
highest in the industry. Nevertheless, inflows are trending positively for real estate funds.
The view on compensation is cautiously optimistic, with half of respondents expecting an increase in their bonus this
year and 35.7% thinking it’s too early in the year to estimate bonus levels; only 7.1% expect a decrease. More than half
(53.3%) said their bonuses are structured on a part formula/part discretionary basis, which is the structure that 80% of
them prefer. Deferred cash compensation remains low, with almost all of the respondents (92.3%) reporting that less
than 10% of their 2012 cash bonus was deferred. Talent in the real estate category report a level of fund participation
considerably higher than their peers, at 71.4% compared to an industry average of 27.4%.
Real estate distribution teams are generally smaller and less structured than those in the broader industry, with
62.5% of respondents reporting no formal alignment and the rest equally split between geography (18.8%) and client
channel (18.8%). Only 26.7% said their firms employ product specialists, who report either exclusively to the investment
team or dually to the investment and sales teams.
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 96
Real Estate
Despite a limited sample size of 23 distribution professionals who identified their firms as private real estate asset
are (in order):
1. Contributions to firm building and adding value across the firm
2. Activity such as meetings, consultant contacts gained and calling
3. Team collaboration
Hiring among real estate managers for the remainder of 2013 is expected to be relatively quiet in the United States,
with 80% of respondents expecting their teams to remain flat. None reported that their firms were actively recruiting
and 13.3% said they were meeting opportunistically with candidates.
The majority of respondents reported that their firms do not have a marketing presence outside the U.S. and are not
actively looking to build one. That is surprising, given conversations that Heidrick & Struggles started in recent months
with several firms looking to build efforts in Asia and Europe. Earlier, we noted higher levels of optimism around
inflows. If that optimism is borne out, we may see global hiring activity rise accordingly.
What is the highest level of education you have completed?
Answer Options
Bachelor's Degree
Response Percent
Response Count
21.7%
5
Master's Degree (non MBA)
30.4%
7
MBA
43.5%
10
Ph.D.
4.3%
answered question
1
23
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
66.7%
10
No
33.3%
5
answered question
15
If yes, by what percentage did your total compensation change?
Answer Options
Response Percent
Response Count
Remained Flat
30.0%
3
Increased by 1% - 9%
10.0%
1
Increased by 10% - 19%
10.0%
1
Increased by 20% - 29%
20.0%
2
Increased by 30% - 39%
20.0%
2
Increased by 40%+
0.0%
0
Decreased by 1% - 9%
0.0%
0
Decreased by 10% - 19%
0.0%
0
Decreased by 20% - 29%
0.0%
0
Decreased by 30% - 39%
10.0%
1
Decreased by 40%+
0.0%
0
answered question
10
Heidrick & Struggles 97
Real Estate
How is performance measured beyond capital raising and retention? The most commonly cited performance metrics
Answer Options
Response Percent
Response Count
Sign-on bonus
20.0%
2
Buy out of equity
0.0%
0
Make whole bonus (100% of anticipated bonus at previous firm)
30.0%
3
Minimum bonus floor (% of anticipated bonus at previous firm)
30.0%
3
Not applicable
40.0%
4
Other (please specify)
0
answered question
10
If you changed firms in the past 3 years, please rank your primary motivation(s) for
change:
Answered: 10
Management opportunity
7.00
9.80
Compensation
9.20
Firm Culture
Brand
Marketability of products
6.75
6.89
Layoffs or restructuring
7.43
Ability to have influence outside of
fundraising
7.38
8.22
Level of value placed on marketing
7.60
People
Opportunity to grow/build the
marketing effort
Greater opportunities for advancement
Firm's willingness to meet client
expectataions
9.30
7.40
6.44
How would you characterize your current state of mind?
Answer Options
Response Percent
Response Count
Actively looking (unemployed)
6.7%
1
Actively looking (currently employed)
33.3%
5
Not looking but open to considering new opportunities if presented
40.0%
6
Not open to considering new opportunities
20.0%
3
Other (please specify)
0
answered question
15
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 98
Real Estate
If you changed firms, were you offered a (check all that apply):
Answer Options
Response Percent
Response Count
Slightly more difficult
20.0%
3
Moderately more difficult
0.0%
0
Significantly more difficult
6.7%
1
About the same
33.3%
5
Moderately easier
33.3%
5
Significantly easier
6.7%
1
Other (please specify)
0
answered question
15
What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Slightly more difficult
13.3%
2
Moderately more difficult
13.3%
2
Significantly more difficult
0.0%
0
About the same
66.7%
10
Moderately easier
6.7%
1
Significantly easier
0.0%
0
Other (please specify)
0
answered question
15
Percentage of inflows from new vs. existing investors
2012
% Inflows from New
Investors
% Inflows from Existing
Investors
75.89
24.11
Real Estate
Capital raising levels per marketer
Firm Type
Range
# of marketers
that raised
zero capital
% of
marketers
that raised
zero capital
Year
Mean
Median
Real Estate
2012
$131,166,666
$100,000,000
$0 - $522,000,000
4/12
33.33%
Real Estate
2013
*YTD
$177,318,181
$162,500,000
$0 - $650,000,000
3/11
27.27%
Notes
* YTD as of June 2013
Heidrick & Struggles 99
Real Estate
What is your view on the level of difficulty in raising capital today compared to 3 years ago?
Answer Options
Increased by less than 10%
Response Percent
Response Count
7.1%
1
Increased by 11% - 15%
0.0%
0
Increased by 16% - 20%
0.0%
0
Increased by 21% - 25%
28.6%
4
Increased by 26% - 30%
7.1%
1
Increased by 31% - 35%
0.0%
0
Increased by 36% - 40%
7.1%
1
Flat from my 2012 bonus
7.1%
1
Increased by greater than 40%
0.0%
0
Decreased by less than 10%
7.1%
1
Decreased by 11% - 15%
0.0%
0
Decreased by 16% - 20%
0.0%
0
Decreased by 21% - 25%
0.0%
0
Decreased by 26% - 30%
0.0%
0
Decreased by 31% - 35%
0.0%
0
Decreased by 36% - 40%
0.0%
0
Decreased by greater than 40%
0.0%
0
Still too early in the year to estimate
35.7%
5
Other (please specify)
1
answered question
14
What percentage of your cash bonus was deferred in 2012?
Answer Options
Less than 10%
10% - $19%
Response Percent
Response Count
92.3%
12
7.7%
1
20% - 29%
0.0%
0
30% - 39%
0.0%
0
40% - 49%
0.0%
0
50% - 60%
0.0%
0
60% - 70%
0.0%
0
70%+
0.0%
0
answered question
13
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 100
Real Estate
What are your bonus expectations for 2013 compared to 2012?
Answer Options
Response Percent
Response Count
Stock options
0.0%
0
Participation in the funds
71.4%
5
Equity-like participation
57.1%
4
Sign on bonus
14.3%
1
Retention bonus
0.0%
0
Other (please specify)
4
answered question
7
Which option best characterizes your current bonus structure?
Answer Options
Response Percent
Response Count
Purely formulaic
13.3%
2
Loosely formulaic driven by metrics
6.7%
1
Purely Discretionary
26.7%
4
Part formula / part discretionary
53.3%
8
Other (please specify)
0.0%
0
Other (please specify)
15
Which bonus structure do you prefer?
Answer Options
Response Percent
Response Count
Purely formulaic
13.3%
2
Loosely formulaic driven by metrics
6.7%
1
Purely Discretionary
0.0%
0
Part formula / part discretionary
80.0%
12
Agnostic
0.0%
0
Other (please specify)
3
answered question
15
How are real estate managers structuring their distribution efforts?
Mean
Median
Range
# of sales/fundraising professionals
2.9
2
1-7
# of product specialists (for firms with product specialists)
NA
NA
NA
# of client facing investor relations professionals
2.7
2
1.7
# of non - client facing client services professionals
3.1
2.5
1-11
Heidrick & Struggles 101
Real Estate
What other components comprise your total compensation (check all that apply)??
Answer Options
Response Percent
Response Count
Geographically
18.8%
3
Client Channel
18.8%
3
Product
0.0%
0
No formal alignment
62.5%
10
Other (please specify)
0
answered question
16
Where do product specialists at your firm report in to?
Answer Options
Response Percent
Response Count
Investment team
13.3%
2
Sales team
0.0%
0
Dual Reporting to investment and sales teams
13.3%
2
Not applicable - my firm does not employ product specialists
73.3%
11
Other (please specify)
0
answered question
15
How successful has the product specialist role been within your current firm?
Answered: 15
0%
Highly successful
13%
Moderately successful
Neutral
7%
Not very successful
7%
0%
Not at all successful
N/A - my firm does not
employ product specialists
73%
US: How would you best characterize your current firm’s hiring plans within *US* distribution for the remainder of 2013?
Answer Options
Currently actively recruiting
Response Percent
Response Count
0.0%
0
Opportunistically meeting potential candidates
13.3%
2
Team will remain flat through year-end
80.0%
12
Currently reducing the size of the team
6.7%
1
Other (please specify)
0
answered question
15
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 102
Real Estate
How is coverage among your current sales team (primarily) aligned?
Answer Options
Response Percent
Response Count
Currently actively recruiting
0.0%
0
Opportunistically meeting potential candidates
13.3%
2
Team will remain flat through year-end
6.7%
1
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in to Asia
80.0%
12
answered question
15
UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
0.0%
0
Opportunistically meeting potential candidates
6.7%
1
Team will remain flat through year-end
20.0%
3
Currently actively recruiting
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the UK or Europe
73.3%
11
Other (please specify)
0
answered question
15
Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
7.1%
1
Opportunistically meeting potential candidates
0.0%
0
Team will remain flat through year-end
0.0%
0
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the Middle East
92.9%
13
Other (please specify)
0
answered question
14
In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?
Answer Options
Response Percent
Response Count
7.1%
1
Hiring an outside candidate within the local region
78.6%
11
Cover the region from the US
0.0%
0
Not applicable: my current firm does not have a marketing presence
outside of the US
14.3%
2
Exporting an existing team member overseas
Other (please specify)
0
answered question
14
Heidrick & Struggles 103
Real Estate
Asia: How would you best characterize your current firm’s hiring plans within *Asia* distribution for the remainder of 2013?
Answer Options
Leveraging industry network
Response Percent
Response Count
46.7%
7
Sourcing investors
0.0%
0
LinkedIn
20.0%
3
Retained executive search
46.7%
7
Contingency executive search
20.0%
3
Professional associations
13.3%
2
Employee referrals
46.7%
7
Internal recruiting function
33.3%
5
Other (please specify)
0
answered question
15
Has your firm used retained search in the past 2 years to hire sales & client services professionals?
Answer Options
Response Percent
Response Count
Yes
40.0%
6
No
46.7%
7
I don't know
13.3%
answered question
2
15
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 104
Real Estate
How does your firm typically recruit sales & client services professionals? (Check all that apply)
Real Estate: Demographics
Answer Options
Response Percent
Response Count
Associate
0.0%
0
Senior Associate
4.8%
1
Vice President
9.5%
2
Senior Vice President
19.0%
4
Director/Principal
19.0%
4
Managing Director (individual contributor)
23.8%
5
Managing Director (management role)
14.3%
3
Partner
9.5%
2
N/A - Not currently employed
0.0%
0
Other (please specify)
2
answered question
21
How many years of total work experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
17.4%
4
11 - 15
21.7%
5
16 - 20
13.0%
3
21 - 25
17.4%
4
26+
30.4%
answered question
7
23
How many years of asset management distribution experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
45.5%
10
11 - 15
27.3%
6
16 - 20
9.1%
2
21 - 25
9.1%
2
26+
9.1%
2
answered question
22
Heidrick & Struggles 105
Real Estate
What is your current job title?
Answer Options
Response Percent
Response Count
36.4%
8
New York
Connecticut
4.5%
1
Boston
13.6%
3
Chicago
18.2%
4
San Francisco
13.6%
3
Los Angeles
0.0%
0
Minneapolis
0.0%
0
Philadelphia
9.1%
2
Miami
0.0%
0
Houston
0.0%
0
Dallas
0.0%
0
Washington D.C.
4.5%
1
Other (please specify)
1
answered question
22
Which investment products are offered by your current firm (check all that apply)?
Answer Options
Response Percent
Response Count
Long Only Equity
0.0%
0
Long Only Fixed Income
0.0%
0
Hedge Funds
0.0%
0
Private Equity
8.7%
2
Hedge Fund of Funds
0.0%
0
Private Equity Fund of Funds
4.3%
1
Real Estate
95.7%
22
Commodities
0.0%
0
Infrastructure
4.3%
1
Other (please specify)
0
answered question
23
How would you characterize the primary focus of your current role?
Answer Options
Response Percent
Response Count
Sales / Fundraising
38.1%
8
Investor Relations / Client Service (client facing)
33.3%
7
Investor Relations / Client Service (non client facing / support)
4.8%
1
Hybrid Sales & Investor Relations
23.8%
5
Product Specialist
0.0%
0
Consultant Relations
0.0%
0
Other (please specify)
2
answered question
21
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 106
Real Estate
Where do you work?
Answer Options
Response Percent
Response Count
<$200mln
4.5%
1
$200mln - $500mln
18.2%
4
$500mln - $1bln
13.6%
3
$1bln
18.2%
4
$2bln
0.0%
0
$3bln
9.1%
2
$4bln
9.1%
2
$5bln
0.0%
0
$6bln
0.0%
0
$7bln
4.5%
1
$8bln
0.0%
0
$9bln
0.0%
0
$10bln
4.5%
1
$11bln
4.5%
1
$12bln
0.0%
0
$13bln
0.0%
0
$14bln
0.0%
0
$15bln
0.0%
0
$16bln
0.0%
0
$17bln
0.0%
0
$18bln
0.0%
0
$19bln
0.0%
0
$20bln - $29bln
4.5%
1
$30bln - $39bln
4.5%
1
$40bln - $49bln
4.5%
1
$50bln - $59bln
0.0%
0
$60bln+
0.0%
0
Other (please specify)
4
answered question
22
Heidrick & Struggles 107
Real Estate
What are the total assets under management of your current firm?
Placement Agents
too small to draw many hard and fast conclusions. Nevertheless, we wanted to share some insights into this unique
population, particularly since a placement agent role can often serve as a stepping stone towards an in-house
marketing role for those looking to make the transition. The majority of respondents had 10+ years of total work
experience, with 29.6% reporting 26+ years. Nearly half (48.1%) had just 5-10 years of asset management experience,
indicating they are relatively new to the business.
Placement agents are more likely to have MBAs (51.9%) than the general asset management population. They are
less likely to have changed firms in the past three years, with just 44.4% reporting they had done so. Individuals
joining placement agents did not experience the same compensation gains as their broader industry peers: just
30.8% reported an increase in compensation, 46.2% remained flat and 23.1% saw a decrease. We do not know if these
individuals were in fact making a career transition, but we suspect that is the case and that it influenced compensation.
The highest-ranking motivator for making a change was overwhelmingly firm culture, followed by people and
marketability of products, which tied for second place. About 32% of survey participants were actively looking for new
roles and 47.4% were open to considering new opportunities.
How do placement agents view the level of difficulty in capital raising today compared to three years ago?
Respondents in this group proved quite divided in their views: 47.4% rated it as more difficult and 36.9% as easier, with
15.8% saying it is about the same. About 41% said retention of client assets is more difficult today and an equal number
said it is about the same; just 17.7% rated retention as easier. Placement agents reported that an average of 59.88% of
capital came from new investors in 2012.
Our survey found median capital raising levels of $105 million per marketer in 2012 to be in line with the broader
industry. Capital raising among placement agents appears to be going up substantially in 2013, with a median of $500
million raised per marketer YTD. When we looked closely at the reported numbers, we found four marketers who
had already hit the $1 billion mark through the first six months of 2013 and only one who had not raised any capital
so far this year. Given the small sample size for this question (16 respondents), these figures may not reflect the full
population of placement agent distribution professionals.
Perhaps corresponding to the reported capital amounts raised in the first six months of the year, bonus expectations
for 2013 are generally high, with 53% of respondents expecting an increase from 2012, 11.8% expecting to remain flat
and 35.3% saying it’s too early in the year to estimate. The majority of placement agents (68.8%) reported deferred
bonus rates of less than 10% in 2012, with 25.1% indicating deferred bonus percentages of 50% or greater. Beyond
base and cash bonus, survey respondents indicated being awarded stock options, the opportunity to participate in the
funds and equity-like participation as part of their total compensation in 2012. About 39% of respondents said their
bonuses were purely formulaic, with an equal number reporting a purely discretionary bonus. Placement agents seem
to be quite divided about their preferred compensation structure. Oddly enough, the highest percentage (33.3%) said
they prefer a purely formulaic bonus but many expressed the desire for more hybrid or discretionary models.
Distribution teams at placement agents are most often aligned geographically (72.2%). Not surprisingly, product
specialist roles are uncommon, with 66.7% of respondents reporting their firms do not employ product specialists,
although when the function exists it is often viewed as successful.
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 108
Placement Agents
With just 5.9% of our survey respondents saying they worked at placement agents, the sample size (27 people) is
metrics are (in order):
• Contributions to business development and project management
• Team collaboration
• Firm/brand building
There is a decent amount of hiring activity among placement agents globally, although most will keep their teams flat
for the year. About 18% of respondents said their firms were actively recruiting and 29.4% opportunistically meeting
candidates in the United States. Outside the U.S., 21.1% of respondents said their firms were either actively recruiting
or opportunistically meeting candidates in Asia, 16.7% in UK/Europe and 11.1% in the Middle East. Placement agents
typically hire directly, with only 21.1% of respondents saying their firms use retained executive search as part of their
recruiting strategy, well below the industry average of 51.9%.
What is the highest level of education you have completed?
Answer Options
Bachelor's Degree
Response Percent
Response Count
37.0%
10
Master's Degree (non MBA)
11.1%
3
MBA
51.9%
14
Ph.D.
0.0%
answered question
0
27
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
44.4%
8
No
55.6%
10
answered question
18
If yes, by what percentage did your total compensation change?
Answer Options
Response Percent
Response Count
46.2%
6
Increased by 1% - 9%
0.0%
0
Increased by 10% - 19%
15.4%
2
Increased by 20% - 29%
7.7%
1
Increased by 30% - 39%
0.0%
0
Increased by 40%+
7.7%
1
Decreased by 1% - 9%
0.0%
0
Decreased by 10% - 19%
7.7%
1
Decreased by 20% - 29%
0.0%
0
Decreased by 30% - 39%
0.0%
0
Decreased by 40%+
15.4%
2
Remained Flat
answered question
13
Heidrick & Struggles 109
Placement Agents
Beyond capital raising, how are placement agents measuring performance? The most commonly cited performance
Answer Options
Response Percent
Response Count
Sign-on bonus
0.0%
0
Buy out of equity
0.0%
0
Make whole bonus (100% of anticipated bonus at previous firm)
0.0%
0
0.0%
0
100.0%
8
Minimum bonus floor (% of anticipated bonus at previous firm)
Not applicable
Other (please specify)
1
answered question
8
If you changed firms in the past 3 years, please rank your primary motivation(s) for
change:
Answered: 8
Management opportunity
3.25
9.17
Compensation
11.00
Firm Culture
Brand
7.17
10.00
Marketability of products
Layoffs or restructuring
6.80
Ability to have influence outside of
fundraising
8.33
9.75
Level of value placed on marketing
10.00
People
Opportunity to grow/build the
marketing effort
8.00
Greater opportunities for advancement
Firm's willingness to meet client
expectataions
8.00
6.75
How would you characterize your current state of mind?
Answer Options
Response Percent
Response Count
Actively looking (unemployed)
0.0%
0
Actively looking (currently employed)
31.6%
6
Not looking but open to considering new opportunities if presented
47.4%
9
Not open to considering new opportunities
21.1%
4
Other (please specify)
0
answered question
19
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 110
Placement Agents
If you changed firms, were you offered a (check all that apply):
Answer Options
Response Percent
Response Count
Slightly more difficult
10.5%
2
Moderately more difficult
15.8%
3
Significantly more difficult
21.1%
4
About the same
15.8%
3
Moderately easier
31.6%
6
Significantly easier
5.3%
1
Other (please specify)
0
answered question
19
What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Slightly more difficult
11.8%
2
Moderately more difficult
11.8%
2
Significantly more difficult
17.6%
3
About the same
41.2%
7
Moderately easier
11.8%
2
Significantly easier
5.9%
1
Other (please specify)
0
answered question
17
Capital raising levels per marketer
# of marketers
that raised
zero capital
% of
marketers
that raised
zero capital
Firm Type
Year
Mean
Median
Range
Placement
Agents
2012
$358,571,429
$105,000,000
$0 –
$2,000,000,000
2/15
13.33%
Placement
Agents
2013
*YTD
$494,000,000
$500,000,000
$0 –
$1,000,000,000
1/16
6.25%
Notes
Excluding 5
outliers citing
$6bln, $7bln,
$8bln, $10bln
and $12bln
* YTD as of June 2013
Heidrick & Struggles 111
Placement Agents
What is your view on the level of difficulty in raising capital today compared to 3 years ago?
Answer Options
Response Percent
Response Count
Increased by less than 10%
0.0%
0
Increased by 11% - 15%
5.9%
1
Increased by 16% - 20%
5.9%
1
Increased by 21% - 25%
5.9%
1
Increased by 26% - 30%
0.0%
0
Increased by 31% - 35%
5.9%
1
Increased by 36% - 40%
23.5%
4
Increased by greater than 40%
5.9%
1
Flat from my 2012 bonus
11.8%
2
Decreased by less than 10%
0.0%
0
Decreased by 11% - 15%
0.0%
0
Decreased by 16% - 20%
0.0%
0
Decreased by 21% - 25%
0.0%
0
Decreased by 26% - 30%
0.0%
0
Decreased by 31% - 35%
0.0%
0
Decreased by 36% - 40%
0.0%
0
Decreased by greater than 40%
0.0%
0
Still too early in the year to estimate
35.3%
6
Other (please specify)
2
answered question
17
What percentage of your cash bonus was deferred in 2012?
Answer Options
Response Percent
Response Count
Less than 10%
68.8%
11
10% - $19%
6.3%
1
20% - 29%
0.0%
0
30% - 39%
0.0%
0
40% - 49%
0.0%
0
50% - 60%
12.5%
2
60% - 70%
6.3%
1
70%+
6.3%
1
answered question
16
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 112
Placement Agents
What are your bonus expectations for 2013 compared to 2012?
Answer Options
Response Percent
Response Count
Stock options
22.2%
2
Participation in the funds
22.2%
2
Equity-like participation
77.8%
7
Sign on bonus
0.0%
0
Retention bonus
0.0%
0
Other (please specify)
0
answered question
9
Which option best characterizes your current bonus structure?
Answer Options
Response Percent
Response Count
Purely formulaic
38.9%
7
Loosely formulaic driven by metrics
11.1%
2
Purely Discretionary
38.9%
7
Part formula / part discretionary
11.1%
2
Other (please specify)
0
answered question
18
Which bonus structure do you prefer?
Answer Options
Response Percent
Response Count
Purely formulaic
33.3%
6
Loosely formulaic driven by metrics
16.7%
3
Purely Discretionary
22.2%
4
Part formula / part discretionary
22.2%
4
Agnostic
5.6%
1
Other (please specify)
0
answered question
18
How is coverage among your current sales team (primarily) aligned?
Answer Options
Response Percent
Response Count
Geographically
72.2%
13
Client Channel
5.6%
1
Product
5.6%
1
No formal alignment
16.7%
3
Other (please specify)
1
answered question
18
Heidrick & Struggles 113
Placement Agents
What other components comprise your total compensation (check all that apply)??
Answer Options
Response Percent
Response Count
Investment team
0.0%
0
Sales team
22.2%
4
Dual Reporting to investment and sales teams
11.1%
2
Not applicable - my firm does not employ product specialists
66.7%
12
Other (please specify)
0
answered question
18
How successful has the product specialist role been within your current firm?
Answered: 19
21%
Highly successful
5%
Moderately successful
11%
Neutral
Not very successful
0%
Not at all successful
0%
N/A - my firm does not
employ product specialists
63%
US: How would you best characterize your current firm’s hiring plans within *US* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
17.6%
3
Opportunistically meeting potential candidates
29.4%
5
Team will remain flat through year-end
52.9%
9
Currently reducing the size of the team
0.0%
0
Other (please specify)
0
answered question
17
Asia: How would you best characterize your current firm’s hiring plans within *Asia* distribution for the remainder of 2013?
Answer Options
Response Percent
Response Count
5.3%
1
Opportunistically meeting potential candidates
15.8%
3
Team will remain flat through year-end
36.8%
7
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in to Asia
42.1%
8
Currently actively recruiting
answered question
19
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 114
Placement Agents
Where do product specialists at your firm report in to?
Answer Options
Response Percent
Response Count
Currently actively recruiting
5.6%
1
Opportunistically meeting potential candidates
11.1%
2
Team will remain flat through year-end
44.4%
8
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the UK or Europe
38.9%
7
Other (please specify)
0
answered question
18
Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
Currently actively recruiting
0.0%
0
Opportunistically meeting potential candidates
11.1%
2
Team will remain flat through year-end
11.1%
2
Currently reducing the size of the team
0.0%
0
No current presence or plans to expand in the Middle East
77.8%
14
Other (please specify)
0
answered question
18
In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?
Answer Options
Response Percent
Response Count
Exporting an existing team member overseas
0.0%
0
Hiring an outside candidate within the local region
88.2%
15
Cover the region from the US
0.0%
0
Not applicable: my current firm does not have a marketing presence
outside of the US
11.8%
2
Other (please specify)
0
answered question
17
Heidrick & Struggles 115
Placement Agents
UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the
remainder of 2013?
Answer Options
Response Percent
Response Count
Leveraging industry network
57.9%
11
Sourcing investors
15.8%
3
LinkedIn
21.1%
4
Retained executive search
21.1%
4
Contingency executive search
21.1%
4
Professional associations
10.5%
2
Employee referrals
52.6%
10
Internal recruiting function
31.6%
6
Other (please specify)
0
answered question
19
Has your firm used retained search in the past 2 years to hire sales & client services professionals?
Answer Options
Response Percent
Response Count
Yes
5.3%
1
No
78.9%
15
I don't know
15.8%
answered question
3
19
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 116
Placement Agents
How does your firm typically recruit sales & client services professionals? (Check all that apply)
Placement Agents: Demographics
Answer Options
Response Percent
Response Count
8.0%
2
Senior Associate
4.0%
1
Vice President
12.0%
3
Senior Vice President
0.0%
0
Director/Principal
20.0%
5
Managing Director (individual contributor)
8.0%
2
Managing Director (management role)
8.0%
2
Partner
36.0%
9
N/A - Not currently employed
4.0%
1
Associate
Other (please specify)
2
answered question
25
How many years of total work experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
18.5%
5
11 - 15
22.2%
6
16 - 20
11.1%
3
21 - 25
18.5%
5
26+
29.6%
answered question
8
27
How many years of asset management distribution experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
48.1%
13
11 - 15
14.8%
4
16 - 20
14.8%
4
21 - 25
14.8%
4
26+
7.4%
2
answered question
27
Heidrick & Struggles 117
Placement Agents
What is your current job title?
Answer Options
Response Percent
Response Count
New York
56.5%
13
Connecticut
4.3%
1
Boston
8.7%
2
Chicago
4.3%
1
San Francisco
13.0%
3
Los Angeles
4.3%
1
Minneapolis
0.0%
0
Philadelphia
4.3%
1
Miami
4.3%
1
Houston
0.0%
0
Dallas
0.0%
0
Washington D.C.
0.0%
0
Other (please specify)
4
answered question
23
Which investment products are offered by your current firm (check all that apply)?
Answer Options
Response Percent
Response Count
Long Only Equity
16.0%
4
Long Only Fixed Income
8.0%
2
Hedge Funds
40.0%
10
Private Equity
84.0%
21
Hedge Fund of Funds
8.0%
2
Private Equity Fund of Funds
28.0%
7
Real Estate
60.0%
15
Commodities
20.0%
5
Infrastructure
36.0%
9
Other (please specify)
3
answered question
25
How would you characterize the primary focus of your current role?
Answer Options
Response Percent
Response Count
Sales / Fundraising
76.9%
20
Investor Relations / Client Service (client facing)
7.7%
2
Investor Relations / Client Service (non client facing / support)
0.0%
0
Hybrid Sales & Investor Relations
15.4%
4
Product Specialist
0.0%
0
Consultant Relations
0.0%
0
Other (please specify)
1
answered question
26
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 118
Placement Agents
Where do you work?
Part Three –
Compensation
Contents
Base Salary •
Traditional asset managers: sales/fundraising and hybrid sales and investor relations 123
•
Multi-product asset managers: sales/fundraising and hybrid sales and
investor relations 124
•
Hedge funds: sales/fundraising and hybrid sales and investor relations 125
•
Private equity: sales/fundraising and hybrid sales and investor relations 126
•
Real estate: sales/fundraising and hybrid sales and investor relations
127
•
Investor relations function
128
•
Product specialist function: all firm types and levels
129
•
Consultant relations function: all firm types and levels
129
•
Placement agents: all firm types and levels
130
•
Traditional asset managers: sales/fundraising and hybrid sales and investor relations 131
•
Multi-product asset managers: sales/fundraising and hybrid sales and investor relations 132
•
Hedge funds: sales/fundraising and hybrid sales and investor relations 133
•
Private equity: sales/fundraising and hybrid sales and investor relations 134
•
Real estate: sales/fundraising and hybrid sales and investor relations
135
•
Investor relations function
136
•
Product specialist function: all firm types
137
•
Consultant relations function: all firm types
137
•
Placement agents 138
Bonus
Compensation
In the following pages we will present our findings on cash compensation,
specifically base and bonus. We collected this data in range format rather than
raw numbers, an approach that made it easier to capture the data but more
difficult to present it. In future studies we will take a different approach.
We had large sample sizes for the sales/fundraising and hybrid sales/fundraising
roles, so in those cases we segmented the data by job function, level and firm
type in order to provide the greatest level of clarity. Where we had smaller
sample sizes, specifically for investor relations/client services, product specialists
and consultant relations, we provided a broader view.
The graphs represent the percentage of individuals reporting their
compensation fell within certain ranges.
Finally, we took a shot at answering the question, “Do MBAs earn more?” We
found a higher representation of MBAs at the higher base levels, but an MBA’s
impact on bonus compensation is less clear.
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 120
Compensation Summary
Base compensation ranges: fundraising and hybrid/fundraising investor relations
functions
Traditional Long
Only
Multi-Product
Private Equity
Hedge Funds
Real Estate
150,000 – 300,000+
125,000 – 300,000+
125,000 – 250,000
No data available
175,000 – 225,000
Senior Vice
President
150,000 – 300,000
100,000 – 300,000
150,000 – 300,000+
150,000 – 275,000
200,000 – 250,000
Director/
Principal
125,000 – 275,000
150,000 – 300,000+
150,000 – 300,000+
125,000 – 275,000
100,000 – 300,000+
MD –
Individual
Contributor
200,000 – 300,000
150,000 – 300,000+
100,000 – 300,000+
150,000 – 300,000+
175,000 – 275,000+
MD –
Management
175,000 – 300,000
175,000 – 300,00+
150,000 – 300,000+
150,000 – 300,000+
175,000 – 275,000+
Partner
No data available
No data available
No data available
175,000 – 300,000+
No data available
37
71
11
55
9
Title
Vice President
Sample Size
Bonus compensation ranges: fundraising and hybrid/fundraising investor relations
functions
Title
Traditional Long
Only
Multi-Product
Private Equity
Hedge Funds
Real Estate
Vice President
100,000 – 200,000
100,000 - 1.1mln
100,000 – 200,000
100,000 – 400,000
No data available
Senior Vice
President
100,000 – 600,000
*plus two outliers
reporting 1.7mln+
100,000 - 500,000
*plus two outliers
reporting 1.2mln+
No data available
300,000 – 900,000
100,000 – 200,000
Director/
Principal
100,000 - 1.3mln
100,000 - 900,000
200,000 – 700,000
100,000 – 1.1mln
100,000 – 300,000
MD –
Individual
Contributor
100,000 – 1.1mln
100,000 – 1.1mln
100,000 – 400,000
100,000 – 3.5mln
100,000 – 1.1mln
MD –
Management
100,000 - 1.7mln
100,000 – 2.5mln
100,000 – 600,000
100,000 – 3mln
No data available
Partner
No data available
100,000 – 1.6mln
300,000 – 1.9mln
200,000 – 1.9mln
No data available
37
72
11
55
9
Sample Size
Heidrick & Struggles 121
Due to smaller sample sizes in several job functions, we summarized our findings below:
Base compensation ranges
Function
Investor Relations
Base Compensation
Range
Sample Size
$125,000 – $300,000+
22
Product Specialist
$125,000 – $300,000+
13
Consultant Relations
$100,000 – $300,000+
54
Placement Agents
$100,000 – $300,000+
17
Function
Base Compensation
Range
Sample Size
Investor Relations
$100,000 – $800,000
22
Bonus compensation ranges
Product Specialist
$100,000 – $1.1mln
13
Consultant Relations
$100,000 – $900,000
53
Placement Agents
$100,000 – $1.4mln
17
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 122
Base Salary
Traditional asset managers: sales/fundraising and hybrid sales and investor
relations
Vice President
Senior Vice President
$150,000 ‑ $174,000
66.7%
$150,000 ‑ $174,000
14.3%
$300,000+
33.3%
$175,000 ‑ $199,000
14.3%
$200,000 ‑ $224,000
14.3%
$225,000 ‑ $249,000
14.3%
$250,000 ‑ $274,000
14.3%
$300,000+
28.6%
Total Respondents
3
Director/Principal
Total Respondents
7
MD - Individual Contributor
$125,000 ‑ $149,000
25.0%
$200,000 ‑ $224,000
40.0%
$150,000 ‑ $174,000
25.0%
$225,000 ‑ $249,000
40.0%
$175,000 ‑ $199,000
12.5%
$275,000 ‑ $299,000
20.0%
$200,000 ‑ $224,000
25.0%
$250,000 ‑ $274,000
12.5%
Total Respondents
8
Total Respondents
5
MD – Managemen Role
Partner
$175,000 ‑ $199,000
7.1%
$200,000 ‑ $224,000
21.4%
$225,000 ‑ $249,000
14.3%
$250,000 ‑ $274,000
7.1%
$300,000+
Not currently employed
Total Respondents
42.9%
7.1%
14
No Respondents
Heidrick & Struggles 123
Base Salary
Total number of respondents: 37
Multi-product asset managers: sales/fundraising and hybrid sales and investor
relations
Vice President
Senior Vice President
$125,000 ‑ $149,000
17.7%
$100,000 ‑ $124,000
7.7%
$150,000 ‑ $174,000
5.9%
$125,000 ‑ $149,000
7.7%
$175,000 ‑ $199,000
29.4%
$150,000 ‑ $174,000
30.1%
$200,000 ‑ $224,000
29.4%
$200,000 ‑ $224,000
38.5%
$275,000 ‑ $299,000
5.9%
$250,000 ‑ $274,000
7.7%
$300,000+
5.9%
$275,000 ‑ $299,000
7.7%
Not currently employed
5.9%
Total Respondents
13
Total Respondents
17
Director/Principal
MD - Individual Contributor
$150,000 ‑ $174,000
15.4%
$150,000 ‑ $174,000
21.4%
$175,000 ‑ $199,000
15.4%
$200,000 ‑ $224,000
35.7%
$200,000 ‑ $224,000
15.4%
$225,000 ‑ $249,000
14.3%
$225,000 ‑ $249,000
15.4%
$250,000 ‑ $274,000
21.4%
$250,000 ‑ $274,000
15.4%
$300,000+
7.1%
$275,000 ‑ $299,000
7.7%
$300,000+
15.4%
Total Respondents
13
MD – Management Role
Total Respondents
14
Partner
$175,000 ‑ $199,000
8.3%
$150,000 ‑ $174,000
50.0%
$200,000 ‑ $224,000
25.0%
$200,000 ‑ $224,000
50.0%
Total Respondents
2
$225,000 ‑ $249,000
8.3%
$250,000 ‑ $274,000
41.7%
$300,000+
16.7%
Total Respondents
12
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 124
Base Salary
Total number of respondents: 71
Hedge funds: sales/fundraising and hybrid sales and investor relations
Vice President
$100,000 ‑ $124,000
Total Respondents
Senior Vice President
100.0%
2
Director/Principal
$150,000 ‑ $174,000
20.0%
$200,000 ‑ $224,000
60.0%
$250,000 ‑ $274,000
20.0%
Total Respondents
5
MD - Individual Contributor
$125,000 ‑ $149,000
12.5%
$150,000 ‑ $174,000
12.5%
$150,000 ‑ $174,000
18.8%
$200,000 ‑ $224,000
25.0%
$175,000 ‑ $199,000
6.3%
$225,000 ‑ $249,000
25.0%
$200,000 ‑ $224,000
31.3%
$250,000 ‑ $274,000
25.0%
$225,000 ‑ $249,000
6.3%
$300,000+
12.5%
$250,000 ‑ $274,000
25.0%
Total Respondents
16
MD – Management Role
Total Respondents
8
Partner
$175,000 ‑ $199,000
5.9%
$175,000 ‑ $199,000
14.3%
$200,000 ‑ $224,000
23.5%
$200,000 ‑ $224,000
42.9%
$225,000 ‑ $249,000
5.9%
$250,000 ‑ $274,000
14.3%
$250,000 ‑ $274,000
41.2%
$300,000+
28.6%
$275,000 ‑ $299,000
5.9%
$300,000+
17.7%
Total Respondents
17
Total Respondents
7
Heidrick & Struggles 125
Base Salary
Total number of respondents: 55
Private equity: sales/fundraising and hybrid sales and investor relations
Vice President
Base Salary
Total number of respondents: 11
Senior Vice President
$225,000 ‑ $249,000
100.0%
Total Respondents
1
Director/Principal
No Respondents
MD - Individual Contributor
$150,000 ‑ $174,000
25.0%
$100,000 ‑ $124,000
50.0%
$200,000 ‑ $224,000
25.0%
$225,000 ‑ $249,000
50.0%
$225,000 ‑ $249,000
25.0%
$300,000+
25.0%
Total Respondents
2
Total Respondents
4
MD – Management Role
Partner
$150,000 ‑ $174,000
50.0%
$300,000+
50.0%
Total Respondents
2
$300,000+
Total Respondents
100.0%
2
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 126
Real estate: sales/fundraising and hybrid sales and investor relations
Vice President
Senior Vice President
No Respondents
Director/Principal
$200,000 ‑ $224,000
50.0%
$225,000 ‑ $249,000
50.0%
Total Respondents
2
MD - Individual Contributor
< $100,000
50.0%
$225,000 ‑ $249,000
66.7%
$250,000 ‑ $274,000
25.0%
$250,000 ‑ $274,000
33.3%
$275,000 ‑ $299,000
25.0%
Total Respondents
3
Total Respondents
3
MD – Management Role
Partner
$175,000 ‑ $199,000
100.0%
Total Respondents
1
No Respondents
Heidrick & Struggles 127
Base Salary
Total number of respondents: 9
Investor relations function
Traditional Asset Manager (independent)
Traditional Asset Manager (bank owned)
$150,000 ‑ $174,000
100.0%
$125,000 ‑ $149,000
100.0%
Total Respondents
1
Total Respondents
1
Multi - Product Asset Manager (independent)
Multi - Product Asset Manager (bank owned)
$150,000 ‑ $174,000
50.0%
$125-149k
$175,000 ‑ $199,000
50.0%
Total Respondents
2
Hedge Fund
Total Respondents
100.0%
1
Real Estate
$100,000 ‑ $124,000
10.0%
$175,000 ‑ $199,000
50.0%
$125,000 ‑ $149,000
10.0%
$200,000 ‑ $224,000
50.0%
$150,000 ‑ $174,000
10.0%
$175,000 ‑ $199,000
20.0%
$200,000 ‑ $224,000
10.0%
$225,000 ‑ $249,000
10.0%
$250,000 ‑ $274,000
10.0%
$300,000+
10.0%
Not currently employed
10.0%
Total Respondents
2
Total Respondents
10
Private Equity
$125,000 ‑ $149,000
20.0%
$150,000 ‑ $174,000
20.0%
$250,000 ‑ $274,000
20.0%
$300,000+
40.0%
Total Respondents
5
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 128
Base Salary
Total number of respondents: 22
Product specialist function: all firm types and levels
$125,000 ‑ $149,000
15.4%
$150,000 ‑ $174,000
7.7%
$200,000 ‑ $224,000
23.1%
$225,000 ‑ $249,000
15.4%
$250,000 ‑ $274,000
7.7%
$275,000 ‑ $299,000
7.7%
$300,000+
23.1%
Total Respondents
13
Consultant relations function: all firm types and levels
Total number of respondents: 54
$100,000 - $124,000
1.9%
$125,000 - $149,000
7.4%
$150,000 - $174,000
18.5%
$175,000 - $199,000
18.5%
$200,000 - $224,000
14.8%
$225,000 - $249,000
14.8%
$250,000 - $274,000
16.7%
$275,000 - $299,000
3.7%
$300,000+
3.7%
Total Respondents
54
Heidrick & Struggles 129
Base Salary
Total number of respondents: 13
Placement Agents: all firm types and levels
< $100,000
11.8%
$100,000 ‑ $124,000
11.8%
$125,000 - $149,000
23.5%
$175,000 - $199,000
17.7%
$200,000 - $224,000
11.8%
$250,000 - $274,000
11.8%
$300,000+
11.8%
$275,000 - $299,000
3.7%
$300,000+
3.7%
Total Respondents
17
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 130
Base Salary
Total number of respondents: 17
Bonus
Traditional asset managers: sales/fundraising and hybrid sales and investor relations
Vice President
Bonus
Total number of respondents: 37
Senior Vice President
< $99,000
66.7%
< $99,000
14.3%
$100,000 ‑ $199,000
33.3%
$300,000 ‑ $399,000
28.6%
$400,000 ‑ $499,000
14.3%
$500,000 ‑ $599,000
14.3%
$1,700,000 ‑ $1,799,000
14.3%
$2,000,000 ‑ $2,499,000
14.3%
Total Respondents
3
Director/Principal
Total Respondents
7
MD - Individual Contributor
$100,000 ‑ $199,000
12.5%
< $99,000
20.0%
$200,000 ‑ $299,000
37.5%
$200,000 ‑ $299,000
20.0%
$300,000 ‑ $399,000
12.5%
$300,000 ‑ $399,000
20.0%
$800,000 ‑ $899,000
12.5%
$1,000,000 ‑ $1,099,000
40.0%
$1,100,000 ‑ $1,199,000
12.5%
$1,200,000 ‑ $1,299,000
12.5%
Total Respondents
8
MD – Management Role
5
Partner
< $99,000
21.4%
$100,000 ‑ $199,000
7.1%
$200,000 ‑ $299,000
14.3%
$400,000 ‑ $499,000
14.3%
$700,000 ‑ $799,000
7.1%
$800,000 ‑ $899,000
14.3%
$1,000,000 ‑ $1,099,000
7.1%
$1,400,000 ‑ $1,499,000
7.1%
$1,600,000 ‑ $1,699,000
7.1%
Total Respondents
Total Respondents
14
No Respondents
Heidrick & Struggles 131
Multi-product asset managers: sales/fundraising and hybrid sales and investor
relations
Vice President
Bonus
Total number of respondents: 72
Senior Vice President
< $99,000
23.5%
Less than $99,000
15.4%
$100,000 ‑ $199,000
29.4%
$100,000 ‑ $199,000
15.4%
$300,000 ‑ $399,000
17.7%
$200,000 ‑ $299,000
15.4%
$500,000 ‑ $599,000
11.8%
$300,000 ‑ $399,000
23.1%
$800,000 ‑ $899,000
5.9%
$400,000 ‑ $499,000
7.7%
$1,000,000 ‑ $1,099,000
5.9%
$1,200,000 ‑ $1,299,000
7.7%
No bonus paid (unemployed)
5.9%
$1,300,000 ‑ $1,399,000
7.7%
No bonus paid (employed)
7.7%
Total Respondents
17
Director/Principal
Total Respondents
13
MD - Individual Contributor
$100,000 ‑ $199,000
15.4%
< $99,000
7.1%
$200,000 ‑ $299,000
15.4%
$100,000 ‑ $199,000
21.4%
$300,000 ‑ $399,000
23.1%
$200,000 ‑ $299,000
7.1%
$400,000 ‑ $499,000
7.7%
$300,000 ‑ $399,000
14.3%
$500,000 ‑ $599,000
15.4%
$400,000 ‑ $499,000
21.4%
$700,000 ‑ $799,000
15.4%
$500,000 ‑ $599,000
7.1%
$800,000 ‑ $899,000
7.7%
$800,000 ‑ $899,000
14.3%
$1,000,000 ‑ $1,099,000
Total Respondents
13
MD – Management Role
Total Respondents
7.1%
14
Partner
$100,000 ‑ $199,000
15.4%
< $99,000
50.0%
$300,000 ‑ $399,000
7.7%
$1,500,000 ‑ $1,599,000
50.0%
$400,000 ‑ $499,000
23.1%
$500,000 ‑ $599,000
15.4%
$600,000 ‑ $699,000
15.4%
$2,000,000 ‑ $2,499,000
15.4%
No bonus paid (employed)
7.7%
Total Respondents
13
Total Respondents
2
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 132
Hedge funds: sales/fundraising and hybrid sales and investor relations
Vice President
Bonus
Total number of respondents: 55
Senior Vice President
< $99,000
50.0%
$300,000 ‑ $399,000
60.0%
$300,000 ‑ $399,000
50.0%
$400,000 ‑ $499,000
20.0%
$800,000 ‑ $899,000
20.0%
Total Respondents
5
Total Respondents
2
Director/Principal
MD - Individual Contributor
< $99,000
12.5%
< $99,000
12.5%
$100,000 ‑ $199,000
6.3%
$100,000 ‑ $199,000
12.5%
$200,000 ‑ $299,000
18.8%
$300,000 ‑ $399,000
12.5%
$300,000 ‑ $399,000
18.8%
$400,000 ‑ $499,000
12.5%
$400,000 ‑ $499,000
6.3%
$500,000 ‑ $599,000
12.5%
$500,000 ‑ $599,000
6.3%
$800,000 ‑ $899,000
12.5%
$600,000 ‑ $699,000
6.3%
$1,000,000 ‑ $1,099,000
12.5%
$700,000 ‑ $799,000
6.3%
$3,000,000 ‑ $3,499,000
12.5%
$800,000 ‑ $899,000
6.3%
$1,000,000 ‑ $1,099,000
6.3%
No bonus paid (employed)
6.3%
Total Respondents
16
MD – Management Role
Total Respondents
8
Partner
< $99,000
5.9%
$200,000 ‑ $299,000
14.3%
$100,000 ‑ $199,000
11.8%
$600,000 ‑ $699,000
14.3%
$200,000 ‑ $299,000
11.8%
$1,000,000 ‑ $1,099,000
14.3%
$400,000 ‑ $499,000
5.9%
$1,100,000 ‑ $1,199,000
28.6%
$500,000 ‑ $599,000
5.9%
$1,800,000 ‑ $1,899,000
14.3%
$700,000 ‑ $799,000
11.8%
No bonus paid (employed)
14.3%
$900,000 ‑ $999,000
5.9%
$1,000,000 ‑ $1,099,000
11.8%
$1,200,000 ‑ $1,299,000
5.9%
$1,300,000 ‑ $1,399,000
5.9%
$1,700,000 ‑ $1,799,000
5.9%
$2,500,000 ‑ $2,999,000
5.9%
No bonus paid (unemployed)
5.9%
Total Respondents
17
Total Respondents
7
Heidrick & Struggles 133
Private equity: sales/fundraising and hybrid sales and investor relations
Vice President
Bonus
Total number of respondents: 11
Senior Vice President
$100,000 ‑ $199,000
100.0%
Total Respondents
1
Director/Principal
No Respondents
MD - Individual Contributor
$200,000 ‑ $299,000
25.0%
< $99,000
50.0%
$300,000 ‑ $399,000
25.0%
$300,000 ‑ $399,000
50.0%
$400,000 ‑ $499,000
25.0%
$600,000 ‑ $699,000
25.0%
Total Respondents
4
Total Respondents
2
MD – Management Role
Partner
< $99,000
50.0%
$300,000 ‑ $399,000
50.0%
$500,000 ‑ $599,000
50.0%
$1,800,000 ‑ $1,899,000
50.0%
Total Respondents
2
Total Respondents
2
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 134
Real estate: sales/fundraising and hybrid sales and investor relations
Vice President
Bonus
Total number of respondents: 9
Senior Vice President
No Respondents
Director/Principal
$100,000 ‑ $199,000
100.0%
Total Respondents
2
MD - Individual Contributor
< $99,000
50.0%
< $99,000
33.3%
$200,000 ‑ $299,000
25.0%
$300,000 ‑ $399,000
33.3%
No bonus paid (unemployed)
25.0%
$1,000,000 ‑ $1,099,000
33.3%
Total Respondents
3
MD – Management Role
No bonus paid (employed)
Total Respondents
Total Respondents
3
Partner
100.0%
1
No Respondents
Heidrick & Struggles 135
Investor relations function
Traditional Asset Manager (independent)
< $99,000
Total Respondents
Bonus
Total number of respondents: 22
Traditional Asset Manager (bank owned)
100.0%
$100,000 ‑ $199,000
100.0%
1
Total Respondents
1
Multi - Product Asset Manager (independent)
Multi - Product Asset Manager (bank owned)
$300,000 ‑ $399,000
100.0%
$100,000 ‑ $199,000
100.0%
Total Respondents
2
Total Respondents
1
Hedge Fund
Real Estate
$100,000 ‑ $199,000
20.0%
$100,000 ‑ $199,000
50.0%
$200,000 ‑ $299,000
30.0%
$200,000 ‑ $299,000
50.0%
$400,000 ‑ $499,000
10.0%
$700,000 ‑ $799,000
10.0%
No bonus paid (employed)
10.0%
No bonus paid (unemployed)
20.0%
Total Respondents
2
Total Respondents
10
Private Equity
Less than $99,000
20.0%
$100,000 ‑ $199,000
20.0%
$200,000 ‑ $299,000
20.0%
$300,000 ‑ $399,000
20.0%
$500,000 ‑ $599,000
20.0%
Total Respondents
5
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 136
Product specialist function: all firm types and levels
< $99,000
7.7%
$100,000 ‑ $199,000
15.4%
$200,000 ‑ $299,000
38.5%
$400,000 ‑ $499,000
7.7%
$600,000 ‑ $699,000
7.7%
$800,000 ‑ $899,000
15.4%
$1,000,000 ‑ $1,099,000
7.7%
Total Respondents
13
Consultant relations function: all firm types and levels
Total number of respondents: 53
< $99,000
5.7%
$100,000 ‑ $199,000
20.8%
$200,000 ‑ $299,000
35.9%
$300,000 - $399,000
15.1%
$400,000 - $499,000
5.7%
$500,000 - $599,000
3.8%
$600,000 - $699,000
3.8%
$700,000 - $799,000
3.8%
$800,000 - $899,000
1.9%
No bonus paid (employed)
1.9%
No bonus paid (unemployed)
1.9%
Total Respondents
53
Heidrick & Struggles 137
Bonus
Total number of respondents: 13
Placement agents: all firm types and levels
< $99,000
33.3%
$100,000 - $199,000
5.6%
$200,000 - $299,000
11.1%
$300,000 - $399,000
5.6%
$500,000 - $599,000
11.1%
$700,000 - $799,000
16.7%
$1,300,000 - $1,399,000
5.6%
No bonus paid (unemployed)
5.6%
Total Respondents
53
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 138
Bonus
Total number of respondents: 18
Do MBAs earn more?
For a bit of fun, we explored how the compensation of distribution professionals
with MBAs compares to those without MBAs. Since virtually all of our survey
respondents are at the vice president level and above, we feel confident that
most individuals have either pursued an MBA or decided against it by this point
in their career.
Because our survey captured base and bonus levels in a range format rather
than raw numbers, we looked at the percentage of individuals reporting
compensation within each respective range.
Interestingly, we noticed a meaningful difference in base salary but not so much
on the bonus. For base salary, there is clearly higher representation of MBAs
in the higher ranges ($225,000+). For bonuses, there is a higher representation
of MBAs in the $500,000 to $1.1 million range, but there is little differentiation
beyond that, perhaps due to a much smaller sample size. We plan to collect raw
numbers in future studies in order to present a clearer view on compensation
overall.
Base Salary
30%
120%
Bachelors
MBA
0%
Not currently employed
0%
<$100,000
20%
$100,000 - $124,000
5%
$125,000 - $149,000
40%
$150,000 - $174,000
10%
$175,000 - $199,000
60%
$200,000 - $224,000
15%
$225,000 - $249,000
80%
$250,000 - $274,000
20%
$275,000 - $299,000
100%
$300,000+
25%
Heidrick & Struggles 139
$4,000,000+
No bonus paid (employed)
Less than $99,000
$100,000 - $199,000
$200,000 - $299,000
$300,000 - $399,000
$400,000 - $499,000
$500,000 - $599,000
$600,000 - $699,000
MBA
$700,000 - $799,000
$800,000 - $899,000
$900,000 - $999,000
$1,000,000 - $1,099,000
$1,100,000 - $1,199,000
$1,200,000 - $1,299,000
$1,300,000 - $1,399,000
$1,400,000 - $1,499,000
$1,500,000 - $1,599,000
30%
$1,600,000 - $1,699,000
$1,700,000 - $1,799,000
$1,800,000 - $1,899,000
$1,900,000 - $1,999,000
$2,000,000 - $2,499,000
$2,500,000 - $2,999,000
$3,000,000 - $3,499,000
$3,500,000 - $3,599,000
Bonus
Bachelors
120%
25%
100%
20%
80%
15%
60%
10%
40%
5%
20%
0%
0%
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 140
Great judgment about leveraging
the investment team(s)
Able to articulate and position
complex strategies effectively to a
range of investors and consultants
Manages expectations, communicates
proactively, meets deadlines
Strong academics
including MBA and / or CFA
Serves as a calm,
trusted advisor
during challenging
times
Analytical / technical depth
Willing to address difficult
situations proactively
Demonstrated
loyalty and
tenure
throughout
their career
Demonstrates ownership and
self-awareness around missteps and
lessons learned from the experience
Culture fit
Quantifiable track record of raising
capital successfully throughout
different economic cycles
Highly responsive; provides
thoughtful, substantive and
consistent follow-up
Willing and able to discuss
products and solutions beyond a
specific product offering
Truly collaborative and
team-oriented
Track record of cultivating long-term
relationships within key client
channels or geographies
Considers investors’
needs holistically;
offers solutions rather
than a product-centric
sales approach
Characteristics
of an Outstanding
Distribution Professional
The outstanding distribution professional possesses a unique mix of qualities, characteristics and
experiences. We pieced together this “portrait” from a variety of sources, including:
- allocator feedback during referencing and sourcing
- commonalities among the “wish lists” from our clients regarding the ideal candidate profile
- Heidrick & Struggles interview observations
Long-term focus on
building trust, respect and
credibility with investors
Demonstrates respect for investors’
time; skilled at running meetings
efficiently, communicating concisely
and listening
Strong work ethic and
competitive spirit coupled
with good sportsmanship
and collaboration
Career history of growth and
success in roles of increased
complexity and responsibility
Professional behavior; consistently
demonstrates strong values in
business as well as social settings
Able to master a specific product offering
as well as understand a firm’s full range of
capabilities across strategies
Willing to serve as a mentor
Demonstrates
patience, calm and
commitment to
outstanding
service during
client interactions
Superior written,
verbal and
interpersonal
communication skills;
able to present with
confidence and
influence
Entrepreneurial by nature; passionate about
building and growing the business
Agile thinker; able to adapt
quickly and calmly to shifting
priorities and demands
Communicates with genuine
passion, energy and excitement
Combines strong strategic
ability with tactical skills in
approaching the market
Straight shooter;
communicates
without spin,
evasiveness or
excessive storytelling
Proactive and
transparent
communication during
periods of fund
underperformance or
key-person changes
Heidrick & Struggles 141
Emerging Trends for
2014 and Beyond
Survey participants shared more than 200 responses to the question “What Key
Themes Do You See Emerging in 2014 and Beyond?”
The most common themes were:
• Redefinition of the role of alternatives within a portfolio; discussions about solutions, not just products; greater
flexibility and creativity.
• Negative impact of rising interest rates.
• Further convergence of traditional and alternative investments.
• Further convergence of institutional and high-net-worth investors.
• Pressure on transparency, fees, compliance, liquidity.
• Further industry consolidation and M&A activity.
• Increased competitive advantage of larger firms.
• Increased attention on individuals with technical skills over generalists for sales professionals.
• Continued rise of OCIO.
• Continued growth of influence by consultants and corresponding rise of consultant-relations specialist roles.
Other themes that emerged include:
• Greater emphasis on disciplined investment process vs. black box model.
• More stable but equally competitive environment for fundraising.
• The rise of product specialist and client-facing investment roles.
• Talent retention issues at the largest firms, fund of funds and single-strategy hedge funds.
• Continued use of liquid alternatives.
• Continued growth of managed accounts and customization.
• Continued move to LDI.
• Fund closures due to underperformance and/or increased cost of doing business.
• Ongoing debate around emerging markets.
• Continued movement from formulaic to discretionary compensation models.
• More sales professionals familiar with multi-asset portfolio construction.
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 142
Topics for Further Exploration
At the close of our survey we asked participants to offer suggestions for
potential future thought leadership reports. We received more than 100
suggestions covering a variety of ideas.
The most common themes were:
• Talent cultivation, retention and compensation
• Succession planning and firm leadership
• Convergence of traditional and alternative investments—how are firms navigating?
• Evolution of the business overall
• Product Specialist role
Other themes that emerged include:
• Client retention
• How to expand a distribution effort globally
• Career management (differentiation, skills, networking)
• Compensation (more granular view overall, alignment of interests, commission vs. discretionary, equity
participation)
• Components of a successful asset management firm
• Innovation within the asset management industry overall and within distribution teams specifically
• How can small firms scale?
• Impact of regulation on the industry (managers and investors)
• Solutions vs. product-centric sales approach
We will endeavor to share our views on these topics through future reports and roundtable breakfasts. In addition,
Heidrick & Struggles’ search consultants partner closely with our Leadership Advisory colleagues and those at our
culture-shaping subsidiary, Senn Delaney. Please reach out if you wish to discuss a customized consulting project.
Heidrick & Struggles 143
Survey Methodology
Heidrick & Struggles sent an online questionnaire to 2,394 asset management
distribution professionals. A total of 495 recipients participated in the survey,
a 20.8% response rate. However, the number of participants who answered a
given question varied widely from question to question, as noted throughout
the report.
Below is a summary of demographic information about our survey population.
What is your current job title?
Answer Options
Associate
Response Percent
Response Count
0.4%
2
Senior Associate
0.7%
3
Vice President
14.4%
65
Senior Vice President
13.3%
60
Director/Principal
23.9%
108
Managing Director (individual contributor)
16.2%
73
Managing Director (management role)
19.3%
87
Partner
8.2%
37
N/A - Not currently employed
3.5%
16
Other (please specify)
53
answered question
451
How many years of total work experience do you have?
Answer Options
Response Percent
Response Count
5 - 10
5.1%
25
11 - 15
21.0%
103
16 - 20
24.0%
118
21 - 25
27.5%
135
26+
22.4%
answered question
110
491
How many years of asset management distribution experience do you have?
Answer Options
5 - 10
Response Percent
Response Count
30.8%
150
11 - 15
28.1%
137
16 - 20
22.2%
108
21 - 25
13.3%
65
26+
5.5%
27
answered question
487
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 144
Where do you work?
Answer Options
New York
Response Percent
Response Count
53.3%
233
Connecticut
7.1%
31
Boston
9.6%
42
Chicago
12.1%
53
San Francisco
7.1%
31
Los Angeles
5.3%
23
Minneapolis
0.7%
3
Philadelphia
3.0%
13
Miami
0.2%
1
Houston
0.0%
0
Dallas
0.9%
4
Washington, D.C.
0.7%
3
Other (please specify)
63
answered question
437
How would you characterize your current firm?
Answer Options
Traditional Asset Manager (independent)
Response Percent
Response Count
15.2%
69
Traditional Asset Manager (bank-owned)
5.9%
27
Multi-Product Asset Manager (independent)
22.0%
100
Multi-Product Asset Manager (bank-owned)
11.5%
52
Hedge Fund
20.9%
95
Private Equity
6.4%
29
Hedge Fund of Funds
3.3%
15
Private Equity Fund of Funds
1.5%
7
Real Estate
5.1%
23
Placement Agent
5.9%
27
OCIO
2.2%
10
Other (please specify)
47
answered question
501
Heidrick & Struggles 145
Which investment products are offered by your current firm (check all that apply)?
Answer Options
Response Percent
Response Count
Long-Only Equity
51.1%
242
Long-Only Fixed Income
44.5%
211
Hedge Funds
54.6%
259
Private Equity
33.3%
158
Hedge Fund of Funds
22.8%
108
Private Equity Fund of Funds
17.3%
82
Real Estate
36.7%
174
Commodities
21.3%
101
Infrastructure
18.8%
89
Other (please specify)
60
answered question
474
If your firm is a hedge fund, what is its primary investment strategy?
Answer Options
Response Percent
Response Count
Long-short equity
27.0%
44
Long bias
3.7%
6
Credit
23.9%
39
Event-driven
9.2%
15
Arbitrage
1.8%
3
Global macro
11.0%
18
Relative Value
1.8%
3
CTA/Managed futures
3.7%
6
Multi-strategy
17.8%
29
Other (please specify)
26
answered question
163
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 146
What are the total assets under management of your current firm?
Answer Options
Response Percent
Response Count
<$200mln
4.4%
20
$200mln - $500mln
5.9%
27
$500mln - $1bln
3.7%
17
$1bln
5.5%
25
$2bln
4.1%
19
$3bln
3.7%
17
$4bln
2.8%
13
$5bln
2.0%
9
$6bln
1.3%
6
$7bln
2.8%
13
$8bln
0.9%
4
$9bln
1.5%
7
$10bln
2.4%
11
$11bln
1.3%
6
$12bln
2.2%
10
$13bln
0.4%
2
$14bln
0.7%
3
$15bln
0.9%
4
$16bln
0.7%
3
$17bln
0.2%
1
$18bln
1.1%
5
$19bln
0.4%
2
$20bln - $29bln
7.9%
36
$30bln - $39bln
2.4%
11
$40bln - $49bln
3.7%
17
$50bln - $59bln
2.4%
11
$60bln+
34.9%
160
Other (please specify)
16
answered question
458
Heidrick & Struggles 147
How would you characterize the primary focus of your current role?
Answer Options
Response Percent
Response Count
Sales / Fundraising
53.4%
243
Investor Relations / Client Service (client-facing)
9.2%
42
Investor Relations / Client Service (non-client-facing / support)
0.9%
4
Hybrid Sales and Investor Relations
17.8%
81
Product Specialist
4.6%
21
Consultant Relations
14.1%
64
Other (please specify)
55
answered question
455
Did you change firms during the past 3 years?
Answer Options
Response Percent
Response Count
Yes
50.1%
190
No
49.9%
answered question
189
379
Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 148
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