Talent and Compensation Trends in Asset Management .../media/Publications and...

Heidrick & Struggles 1

Mid-Year Review August 2013

Laurie Thompson Chad Astmann Paul Charles

Charlie KershawSteven McCrindle

Talent and Compensation Trends in Asset Management Distribution

Talent and Compensation Trends in Asset Management Distribution Mid-Year Review 2

Introduction 3

Key Findings 4

Part One – Summary Broad General Trends across Traditional, Multi-Product, Hedge Funds, 5 Placement Agents and Private Equity Firms

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 Two – Focus on Firm Types 19Traditional 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 Three – Compensation 119Base Salary 123

Bonus 131

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

Contents


IntroductionWhile 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.


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

Broad General Trends across Traditional, Multi-Product, Hedge Funds, Placement Agents and Private Equity Firms

Part One – Summary

Contents

Profile of the Talent Pool 6Capital Raising and Retention 9Compensation 12General Team Structure 14The Product Specialist Role 15Beyond Capital Raising and Retention – Measuring Performance 15Global Hiring Environment and Strategies – Expanding Beyond the United States 16


Profile of the Talent Pool 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 Response Percent Response Count

Bachelor’s Degree 41.1% 202

Master’s Degree (non MBA) 11.6% 57

MBA 44.9% 221

Ph.D. 2.4% 12

answered question 492

Certifications:Do you hold any certifications?


CFA 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

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


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

Part One – Summary

Summ

ary


also become increasingly difficult to assess performance and effectiveness, particularly around capital raising, given

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?


Yes 50.1% 190

No 49.9% 189


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?


Remained Flat 26.7% 56

Increased by 1% - 9% 7.1% 15

Increased by 10% - 19% 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


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

Summ

ary


If you changed firms, were you offered a (check all that apply):


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



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

8.96

6.67Management opportunity

Compensation

Firm Culture

Brand

Marketability of products

Layoffs or restructuring

Ability to have influence outside of fundraising

Level of value placed on marketing

People

Opportunity to grow/build the marketing effort

Greater opportunities for advancement

Firm's willingness to meet client expectataions

9.07

6.99

6.94

7.20

8.84

9.45

8.09

5.96

8.57

6.93

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.

Summ

ary


Looking at those who described themselves as “actively looking,” when we combined employed and unemployed

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?


Actively looking (unemployed) 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



Capital Raising & RetentionThere 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?


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



Summ

ary


What is your view on the level of difficulty in retaining client assets today compared to 3 years ago?









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.

Firm Type% 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

Traditional Asset Management Bank-Owned 70.00 30.00

Traditional Asset Management Independent 65.15 34.85

Summary Average 65.48 34.52

Summ

ary


We also looked at capital raised per individual in 2012 and YTD 2013 and found a broad range of experiences across

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 Notes

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%


2013 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

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 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%


2013 1,167,061,403 300,000,000 0 - 5,000,000,000 6/58 10.34% Minus 5 outliers citing $6bln, $7bln, $8bln, $10bln and $12bln

Multi-Product Asset Manager - Bank Owned

2012 400,285,714 250,000,000 0 - 2,000,000,000 2/28 7.14%


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%

Summ

ary


Compensation Broadly speaking, when looking at compensation across all levels, firm types and functions, we uncovered the

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?


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



Summ

ary


When looking at deferred compensation, we found that 67.82% of respondents had less than 10% of their cash bonus

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?


Less than 10% 67.8% 236

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% 2


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)?


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



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?


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



Summ

ary


Just about half (49%) of respondents reported a preference for the part formula/part discretionary hybrid model and

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?






Agnostic 6.2% 22



General Team StructureLooking 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 specialists1 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

1. For firms employing product specialists

We also considered how teams are aligned.

How is coverage among your current sales team (primarily) aligned?


Geographically 50.3% 186

Client Channel 20.0% 74

Product 1.9% 7

No formal alignment 27.8% 103



Summ

ary


The Product Specialist RoleIn our client work, we have seen a high level of debate around the product specialist role. The product specialist has

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?


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



How successful has the product specialist been within your current firm?Answered: 367

N/A - my firm does notemploy product specialists

Not at all successful

Not very successful

Neutral

Moderately successful 26%

Highly successful 17%

13%

41%

1%

3%

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.)

Summ

ary


Many respondents cited activity (number of calls and meetings, consultant approval ratings, number of final meetings

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?


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



Asia: How would you best characterize your current firm's hiring plans within *Asia* distribution for the remainder of 2013?






No current presence or plans to expand in to Asia 48.1% 152


Summ

ary


UK/Europe: How would you best characterize your current firm's hiring plans within *UK/European* distribution for the remainder of 2013?






No current presence or plans to expand in the UK or Europe 40.6% 127



Middle East: How would you best characterize your current firm's hiring plans within *Middle Eastern* distribution for the remainder of 2013?






No current presence or plans to expand in the Middle East 64.6% 197



In your view, what is the most effective strategy for a firm to expand its marketing effort overseas?


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



How does your firm typically recruit sales & client services professionals? (Check all that apply)


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



Summ

ary


There is considerable debate about how to penetrate markets outside the U.S. most effectively when firms decide

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.

Summ

ary

Part Two – Focus on Firm Types

Contents

Traditional Asset Managers – Independent 21Traditional Asset Managers – Bank-Owned 33Multi-Product Asset Manager – Independent 46Multi-Product Asset Manager – Bank-Owned 58Hedge Funds 70Private Equity 83Real Estate 96Placement Agents 108


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

Traditional Asset Managers – Bank-Owned

Multi-Product Asset Manager – Independent

Multi-Product Asset Manager – Bank-Owned

Hedge Funds

Private Equity

Hedge Fund of Funds

Private Equity Fund of Funds

Real Estate

Placement Agents

OCIO

15.2%

5.9%

22.0%

11.5%

20.9%

6.4%

3.3%

1.5%

5.1%

5.9%

2.2%

Part Two – Focus on Firm Types


Traditional Asset M

anagers – Independent

Traditional Asset Managers – Independent

There has been significant movement over the past three years among distribution talent working for traditional asset

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


Traditional Asset M


are organized predominantly along geographic lines (60%) rather than client channels (17%). Notably, we found that

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


Bachelor's Degree 46.4% 32

Master's Degree (non MBA) 4.3% 3

MBA 49.3% 34

Ph.D. 0.0% 0




Yes 57.4% 31

No 42.6% 23



Traditional Asset M


If you changed firms within the past 3 years, by what percentage did your total compensation change?



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



Decreased by 10% - 19% 6.5% 2

Decreased by 20% - 29% 3.2% 1

Decreased by 30% - 39% 9.7% 3













9.05

7.51

9.23

6.22

6.89

7.18

8.51

9.66

7.50

6.33

8.26

7.00

Management opportunity

Compensation

Firm Culture

Brand





People




































Investors

Traditional Asset Management – Independent 65.15 34.85

Traditional Asset M



Capital raising levels per marketer



% of marketers that raised

zero capital Notes


2012 $466,857,142 $180,000,000 $0 - $3,300,000,000 8/35 22.08%


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




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




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





Traditional Asset M





Less than 10% 69.4% 34

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

























Agnostic 2.0% 1



Traditional Asset M



How are independent traditional asset managers structuring their distribution efforts?

Mean Median Range


# 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





Product 1.9% 1




Where do product specialists at your firm report in to?



Sales team 20.4% 10

Dual Reporting to investment and sales teams 14.3% 7




How successful has the product specialist role been within your current firm?Answered: 53


21%

11%

19%

45%

0%

4%

Highly successful

Moderately successful

Neutral

Not very successful


Traditional Asset M











Asia: How would you best characterize your current firm’s hiring plans within *Asia* distribution for the remainder of 2013?


























Traditional Asset M









20.8% 10







LinkedIn 8.2% 4








Has your firm used retained search in the past 2 years to hire sales & client services professionals?


Yes 60.0% 30

No 30.0% 15

I don't know 10.0% 5


Traditional Asset M



Traditional Asset Managers – Independent: Demographics

What is your current job title?


Associate 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



How many years of total work experience do you have?


5 - 10 1.5% 1

11 - 15 14.7% 10

16 - 20 19.1% 13

21 - 25 35.3% 24

26+ 29.4% 20


How many years of asset management distribution experience do you have?


5 - 10 21.7% 15

11 - 15 29.0% 20

16 - 20 26.1% 18

21 - 25 14.5% 10

26+ 8.7% 6


Traditional Asset M



Where do you work?


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



Which investment products are offered by your current firm (check all that apply)?


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



How would you characterize the primary focus of your current role?


Sales / Fundraising 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



Traditional Asset M



What are the total assets under management of your current firm?


<$200mln 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



Traditional Asset M



Traditional Asset Managers – Bank-Owned

With only 27 survey respondents characterizing their firms as bank-owned traditional asset managers, our sample size

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.

Traditional Asset M

anagers – Bank-Ow

ned


Traditional Asset M

anagers – Bank-Ow

ned

Product specialists are another differentiator between the two groups. About 53% of respondents at bank-owned

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).





MBA 48.1% 13

Ph.D. 0.0% 0




Yes 44.4% 8

No 55.6% 10



If you changed firms within the past three years, by what percentage did your total compensation change?



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



Decreased by 10% - 19% 0.0% 0

Decreased by 20% - 29% 16.7% 1

Decreased by 30% - 39% 0.0% 0


answered question 6









answered question 6

Traditional Asset M

anagers – Bank-Ow

ned


Traditional Asset M

anagers – Bank-Ow

ned


8.33

7.60

7.60

7.75

6.67

8.80

8.83

10.82

6.83

4.60

9.33

7.80


Compensation

Firm Culture

Brand





People




































Investors

Traditional Asset Management – Bank-Owned 70.00 30.00





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%


Traditional Asset M

anagers – Bank-Ow

ned


Traditional Asset M

anagers – Bank-Ow

ned




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




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







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 9















Agnostic 7.1% 1



How are Bank-Owned Traditional Asset Managers structuring their distribution efforts?

Mean Median Range

# of sales/fundraising professionals 24 10.5 2 - 100


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

Traditional Asset M

anagers – Bank-Ow

ned


Traditional Asset M

anagers – Bank-Ow

ned





Product 0.0% 0







Sales team 23.5% 4







17%

39%

22%

17%

0%

6%

Highly successful


Neutral

Not very successful











































18.2% 2



Traditional Asset M

anagers – Bank-Ow

ned


Traditional Asset M

anagers – Bank-Ow

ned





LinkedIn 7.7% 1










Yes 57.1% 8

No 21.4% 3




Traditional Asset Managers – Bank Owned: Demographics



Associate 0.0% 0







Partner 0.0% 0






5 - 10 0.0% 0

11 - 15 11.1% 3

16 - 20 33.3% 9

21 - 25 25.9% 7

26+ 29.6% 8




5 - 10 11.1% 3

11 - 15 25.9% 7

16 - 20 37.0% 10

21 - 25 14.8% 4

26+ 11.1% 3


Traditional Asset M

anagers – Bank-Ow

ned


Traditional Asset M

anagers – Bank-Ow

ned

Where do you work?


New York 50.0% 10

Connecticut 5.0% 1

Boston 25.0% 5

Chicago 10.0% 2


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








Hedge Funds 33.3% 9




Real Estate 29.6% 8

Commodities 22.2% 6








Investor Relations / Client Service (non client facing / support) 0.0% 0









<$200mln 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



Traditional Asset M

anagers – Bank-Ow

ned


Multi-Product Asset Manager – Independent

Our survey of distribution professionals at multi-product asset managers includes responses from a wide range of

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.

Multi-Product A

sset Managers – Independent


Beyond capital raising and retention, how are independent multi-asset managers measuring performance?

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.





MBA 44.0% 44

Ph.D. 2.0% 2




Yes 52.6% 40

No 47.4% 36






Increased by 10% - 19% 8.2% 4

Increased by 20% - 29% 16.3% 8

Increased by 30% - 39% 12.2% 6



Decreased by 10% - 19% 6.1% 3

Decreased by 20% - 29% 4.1% 2

Decreased by 30% - 39% 2.0% 1



Multi-Product A



Multi-Product A












8.87

5.44

9.74

6.81

6.43

7.24

8.85

8.85

8.55

6.06

8.73

7.16


Compensation

Firm Culture

Brand





People




































Investors

Multiproduct Asset Managers – Independent 71.12 28.88



# of marketers that raised

zero capital



2012 $459,826,923 $250,000,000 $0 - $3,000,000,000 5/52 9.61%


2013 *YTD

$1,167,061,403 $300,000,000 $0 - $5,000,000,000 6/58 10.34% Excluding 5 outliers citing $6bln, $7bln, $8bln, $10bln and $12bln

*YTD as of June 2013

Multi-Product A



Multi-Product A





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




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







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



What other components comprise your total compensation (check all that apply)??























Agnostic 5.3% 4



How are independent multi-product asset managers structuring their distribution efforts?

Mean Median Range



9.25 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

Multi-Product A



Multi-Product A






Product 2.6% 2







Sales team 30.6% 22







36%

27%

15%

20%

0%

3%

Highly successful


Neutral

Not very successful











































13.8% 9



Multi-Product A



Multi-Product A






LinkedIn 15.3% 11










Yes 53.4% 39

No 21.9% 16




Multi-Product Asset Manager – Independent: Demographics



Associate 0.0% 0







Partner 5.6% 5






5 - 10 5.0% 5

11 - 15 26.0% 26

16 - 20 21.0% 21

21 - 25 34.0% 34

26+ 14.0% 14




5 - 10 36.7% 36

11 - 15 21.4% 21

16 - 20 23.5% 23

21 - 25 11.2% 11

26+ 7.1% 7


Multi-Product A



Multi-Product A


Where do you work?


New York 52.3% 46

Connecticut 4.5% 4

Boston 10.2% 9

Chicago 13.6% 12


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






























<$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



Multi-Product A



Multi-Product Asset Manager – Bank-Owned

The sample size of 52 respondents for bank-owned multi-product firms is only about half the number of their

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:


2. Strategic firm building

3. Activity

Multi-Product A

sset Managers – Bank-O

wned


Multi-Product A


wned

The hiring outlook for the remainder of 2013 for bank owned multi-product firms seems moderately strong in the

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.





MBA 51.9% 27

Ph.D. 3.8% 2




Yes 42.5% 17

No 57.5% 23





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



Decreased by 10% - 19% 0.0% 0

Decreased by 20% - 29% 0.0% 0

Decreased by 30% - 39% 0.0% 0














9.12

7.47

7.63

7.13

7.57

8.13

7.65

10.00

7.75

5.93

7.69

7.24


Compensation

Firm Culture

Brand





People












Multi-Product A


wned


Multi-Product A


wned
























Investors

Multi-Product Asset Managers – Bank Owned 63.42 36.58






2012 400,285,714 250,000,000 0 - 2,000,000,000 2/28 7.14%


2013 *YTD

331,678,571 115,000,000 0 - 1,500,000,000 4/29 13.79% Minus 1 outlier citing $5bln






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




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







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


Multi-Product A


wned


Multi-Product A


wned
























Agnostic 7.7% 3



How are bank owned multi-product asset managers structuring their distribution efforts?

Mean Median Range



11 7 2-60


# of non - client facing client services professionals *

12.8 10 1-50






Product 0.0% 0







Sales team 16.2% 6







56%

13%

10%

13%

5%

3%

Highly successful


Neutral

Not very successful










Multi-Product A


wned


Multi-Product A


wned

































2.6% 1








LinkedIn 31.6% 12










Yes 50.0% 19

No 21.1% 8



Multi-Product A


wned


Multi-Product A


wned

Multi-Product Asset Manager – Bank-Owned: Demographics



Associate 0.0% 0







Partner 0.0% 0






5 - 10 3.8% 2

11 - 15 9.6% 5

16 - 20 36.5% 19

21 - 25 21.2% 11

26+ 28.8% 15




5 - 10 19.2% 10

11 - 15 28.8% 15

16 - 20 32.7% 17

21 - 25 15.4% 8

26+ 3.8% 2



Where do you work?


New York 48.9% 22

Connecticut 2.2% 1

Boston 13.3% 6

Chicago 17.8% 8


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



























Multi-Product A


wned


Multi-Product A


wned



<$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




Hedge Funds

Midway through 2013, hedge funds remain an active recruiting market for distribution professionals, although the

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.

Hedge Funds

Hedge Funds


Bonus expectations are quite mixed, with 56.2% of respondents expecting an increase in 2013, 20.5% saying it’s

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


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.

Hedge Funds






MBA 44.7% 42

Ph.D. 1.1% 1




Yes 60.0% 45

No 40.0% 30






Increased by 10% - 19% 6.5% 3

Increased by 20% - 29% 21.7% 10

Increased by 30% - 39% 13.0% 6



Decreased by 10% - 19% 4.3% 2

Decreased by 20% - 29% 4.3% 2

Decreased by 30% - 39% 4.3% 2












Hedge Funds



8.90

6.83

8.80

7.13

6.86

6.34

8.88

9.92

9.03

6.18

8.49

6.34


Compensation

Firm Culture

Brand





People






















Hedge Funds
















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%





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




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





Hedge Funds




Less than 10% 65.8% 48

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

























Agnostic 7.0% 5



Hedge Funds


How are hedge funds structuring their distribution teams?Mean Median Range


# 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





Product 4.1% 3







Sales team 17.8% 13





Hedge Funds




11%

13%

71%

0%

1%

4%

Highly successful


Neutral

Not very successful



























Hedge Funds

















24.2% 16



How does your firm typically recruit sales & client services professionals? (check all that apply)




LinkedIn 6.0% 4










Yes 37.7% 26

No 55.1% 38

I don't know 7.2% 5


Hedge Funds


Hedge Funds: Demographics



Associate 0.0% 0







Partner 11.2% 10






5 - 10 6.3% 6

11 - 15 30.5% 29

16 - 20 26.3% 25

21 - 25 25.3% 24

26+ 11.6% 11




5 - 10 35.1% 33

11 - 15 38.3% 36

16 - 20 17.0% 16

21 - 25 9.6% 9

26+ 0.0% 0


Hedge Funds


Where do you work?


New York 72.8% 67

Connecticut 10.9% 10

Boston 1.1% 1

Chicago 6.5% 6


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












Real Estate 9.8% 9

Commodities 6.5% 6














Hedge Funds


If your firm is a hedge fund, what is its primary investment strategy?


Long short equity 23.3% 21

Long bias 1.1% 1

Credit 24.4% 22

Event driven 14.4% 13

Arbitrage 1.1% 1

Global macro 13.3% 12

Relative Value 3.3% 3

CTA/Managed futures 4.4% 4

Multi-strategy 14.4% 13



Hedge Funds




<$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



Hedge Funds


Private Equity

The private equity industry has experienced a transformation in fundraising and investor relations. Many firms, whose

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.

Private Equity


A startling 71% of respondents said they are opportunistic when it comes to considering other career opportunities

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.

Private Equity


Private Equity

Half of the respondents said their firms are actively recruiting or are open to meeting with potential hires in the United

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.





MBA 34.5% 10

Ph.D. 10.3% 3




Yes 40.0% 10

No 60.0% 15





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



Decreased by 10% - 19% 0.0% 0

Decreased by 20% - 29% 0.0% 0

Decreased by 30% - 39% 0.0% 0












answered question 7


8.14

5.20

9.29

9.60

7.43

8.00

10.00

9.88

6.57

3.83

8.86

7.43


Compensation

Firm Culture

Brand





People












Private Equity

























Investors

Private Equity 59.55 40.45





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


Private Equity





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




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







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


Private Equity

























Agnostic 15.0% 3



How are private equity firms structuring their distribution efforts?Mean Median Range

# of sales/fundraising professionals (1) 7.2 4 1-20


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

Private Equity






Product 0.0% 0







Sales team 20.8% 5







23%

14%

45%

0%

0%

18%

Highly successful


Neutral

Not very successful










Private Equity


































0.0% 0



Private Equity






LinkedIn 17.6% 3










Yes 33.3% 7

No 42.9% 9



Private Equity


Private Equity: Demographics



Associate 0.0% 0







Partner 17.9% 5






5 - 10 3.4% 1

11 - 15 37.9% 11

16 - 20 27.6% 8

21 - 25 17.2% 5

26+ 13.8% 4




5 - 10 41.4% 12

11 - 15 34.5% 10

16 - 20 17.2% 5

21 - 25 6.9% 2

26+ 0.0% 0


Private Equity


Where do you work?


New York 57.7% 15

Connecticut 3.8% 1

Boston 7.7% 2

Chicago 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








Hedge Funds 28.6% 8




Real Estate 32.1% 9

Commodities 3.6% 1














Private Equity




<$200mln 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



Private Equity


Real Estate

Despite a limited sample size of 23 distribution professionals who identified their firms as private real estate asset

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.

Real Estate


How is performance measured beyond capital raising and retention? The most commonly cited performance metrics

are (in order):

1. Contributions to firm building and adding value across the firm

2. Activity such as meetings, consultant contacts gained and calling


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.





MBA 43.5% 10

Ph.D. 4.3% 1




Yes 66.7% 10

No 33.3% 5





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



Decreased by 10% - 19% 0.0% 0

Decreased by 20% - 29% 0.0% 0

Decreased by 30% - 39% 10.0% 1



Real Estate












9.80

7.00

9.20

7.43

7.38

8.22

7.60

9.30

7.40

6.44

6.89

6.75


Compensation

Firm Culture

Brand





People












Real Estate























2012% Inflows from New


Investors

Real Estate 75.89 24.11





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%


Real Estate





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




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







Less than 10% 92.3% 12

10% - $19% 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


Real Estate










answered question 7







Other (please specify) 0.0% 0








Agnostic 0.0% 0



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

Real Estate






Product 0.0% 0







Sales team 0.0% 0





How successful has the product specialist role been within your current firm?

Answered: 15


13%

73%

0%

0%

7%

7%

Highly successful


Neutral

Not very successful










Real Estate


































14.3% 2



Real Estate






LinkedIn 20.0% 3










Yes 40.0% 6

No 46.7% 7



Real Estate


Real Estate: Demographics



Associate 0.0% 0







Partner 9.5% 2






5 - 10 17.4% 4

11 - 15 21.7% 5

16 - 20 13.0% 3

21 - 25 17.4% 4

26+ 30.4% 7




5 - 10 45.5% 10

11 - 15 27.3% 6

16 - 20 9.1% 2

21 - 25 9.1% 2

26+ 9.1% 2


Real Estate


Where do you work?


New York 36.4% 8

Connecticut 4.5% 1

Boston 13.6% 3

Chicago 18.2% 4


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








Hedge Funds 0.0% 0





Commodities 0.0% 0














Real Estate




<$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



Real Estate


Placement Agents

With just 5.9% of our survey respondents saying they worked at placement agents, the sample size (27 people) is

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.

Placement A

gents


Beyond capital raising, how are placement agents measuring performance? The most commonly cited performance

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%.





MBA 51.9% 14

Ph.D. 0.0% 0




Yes 44.4% 8

No 55.6% 10






Increased by 10% - 19% 15.4% 2

Increased by 20% - 29% 7.7% 1

Increased by 30% - 39% 0.0% 0



Decreased by 10% - 19% 7.7% 1

Decreased by 20% - 29% 0.0% 0

Decreased by 30% - 39% 0.0% 0



Placement A

gents










answered question 8


9.17

3.25

11.00

6.80

8.33

9.75

10.00

8.00

8.00

6.75

10.00

7.17


Compensation

Firm Culture

Brand





People












Placement A

gents


























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% Excluding 5 outliers citing $6bln, $7bln, $8bln, $10bln and $12bln


Placement A

gents





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




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







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


Placement A

gents










answered question 9















Agnostic 5.6% 1







Product 5.6% 1




Placement A

gents





Sales team 22.2% 4







5%

21%

63%

0%

0%

11%

Highly successful


Neutral

Not very successful


















Placement A

gents


























11.8% 2



Placement A

gents






LinkedIn 21.1% 4










Yes 5.3% 1

No 78.9% 15



Placement A

gents


Placement Agents: Demographics



Associate 8.0% 2







Partner 36.0% 9






5 - 10 18.5% 5

11 - 15 22.2% 6

16 - 20 11.1% 3

21 - 25 18.5% 5

26+ 29.6% 8




5 - 10 48.1% 13

11 - 15 14.8% 4

16 - 20 14.8% 4

21 - 25 14.8% 4

26+ 7.4% 2


Placement A

gents


Where do you work?


New York 56.5% 13

Connecticut 4.3% 1

Boston 8.7% 2

Chicago 4.3% 1


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













Commodities 20.0% 5














Placement A

gents

Part Three – Compensation

Contents

Base Salary

• Traditional asset managers: sales/fundraising and hybrid sales and 123 investor relations

• Multi-product asset managers: sales/fundraising and hybrid sales and 124 investor relations

• 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

Bonus

• Traditional asset managers: sales/fundraising and hybrid sales and 131 investor relations

• Multi-product asset managers: sales/fundraising and hybrid sales and 132 investor relations

• 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


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.

Compensation


Compensation Summary

Base compensation ranges: fundraising and hybrid/fundraising investor relations functions

TitleTraditional Long

Only Multi-Product Private Equity Hedge Funds Real Estate

Vice President 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

Sample Size 37 71 11 55 9

Bonus compensation ranges: fundraising and hybrid/fundraising investor relations functions

TitleTraditional 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


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

Sample Size 37 72 11 55 9


Due to smaller sample sizes in several job functions, we summarized our findings below:

Base compensation ranges

Function Base Compensation

Range Sample Size

Investor Relations $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

Bonus compensation ranges

Function Base Compensation

Range Sample Size

Investor Relations $100,000 – $800,000 22

Product Specialist $100,000 – $1.1mln 13

Consultant Relations $100,000 – $900,000 53

Placement Agents $100,000 – $1.4mln 17


Traditional asset managers: sales/fundraising and hybrid sales and investor relations Total number of respondents: 37

Vice President

$150,000 ‑ $174,000 66.7%

$300,000+ 33.3%

Total Respondents 3

Director/Principal

$125,000 ‑ $149,000 25.0%

$150,000 ‑ $174,000 25.0%

$175,000 ‑ $199,000 12.5%

$200,000 ‑ $224,000 25.0%

$250,000 ‑ $274,000 12.5%

Total Respondents 8

MD – Managemen Role

$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+ 42.9%

Not currently employed 7.1%

Total Respondents 14


$150,000 ‑ $174,000 14.3%

$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 7

MD - Individual Contributor

$200,000 ‑ $224,000 40.0%

$225,000 ‑ $249,000 40.0%

$275,000 ‑ $299,000 20.0%

Total Respondents 5

Partner

No Respondents

Base Salary

Base Salary


Vice President

$125,000 ‑ $149,000 17.7%

$150,000 ‑ $174,000 5.9%

$175,000 ‑ $199,000 29.4%

$200,000 ‑ $224,000 29.4%

$275,000 ‑ $299,000 5.9%

$300,000+ 5.9%



Director/Principal

$150,000 ‑ $174,000 15.4%

$175,000 ‑ $199,000 15.4%

$200,000 ‑ $224,000 15.4%

$225,000 ‑ $249,000 15.4%

$250,000 ‑ $274,000 15.4%

$275,000 ‑ $299,000 7.7%

$300,000+ 15.4%


MD – Management Role

$175,000 ‑ $199,000 8.3%

$200,000 ‑ $224,000 25.0%

$225,000 ‑ $249,000 8.3%

$250,000 ‑ $274,000 41.7%

$300,000+ 16.7%



$100,000 ‑ $124,000 7.7%

$125,000 ‑ $149,000 7.7%

$150,000 ‑ $174,000 30.1%

$200,000 ‑ $224,000 38.5%

$250,000 ‑ $274,000 7.7%

$275,000 ‑ $299,000 7.7%



$150,000 ‑ $174,000 21.4%

$200,000 ‑ $224,000 35.7%

$225,000 ‑ $249,000 14.3%

$250,000 ‑ $274,000 21.4%

$300,000+ 7.1%


Partner

$150,000 ‑ $174,000 50.0%

$200,000 ‑ $224,000 50.0%

Total Respondents 2

Multi-product asset managers: sales/fundraising and hybrid sales and investor relations Total number of respondents: 71 Base Salary



$175,000 ‑ $199,000 5.9%

$200,000 ‑ $224,000 23.5%

$225,000 ‑ $249,000 5.9%

$250,000 ‑ $274,000 41.2%

$275,000 ‑ $299,000 5.9%

$300,000+ 17.7%


Partner

$175,000 ‑ $199,000 14.3%

$200,000 ‑ $224,000 42.9%

$250,000 ‑ $274,000 14.3%

$300,000+ 28.6%

Total Respondents 7

Vice President

$100,000 ‑ $124,000 100.0%

Total Respondents 2

Director/Principal

$125,000 ‑ $149,000 12.5%

$150,000 ‑ $174,000 18.8%

$175,000 ‑ $199,000 6.3%

$200,000 ‑ $224,000 31.3%

$225,000 ‑ $249,000 6.3%

$250,000 ‑ $274,000 25.0%



$150,000 ‑ $174,000 20.0%

$200,000 ‑ $224,000 60.0%

$250,000 ‑ $274,000 20.0%

Total Respondents 5


$150,000 ‑ $174,000 12.5%

$200,000 ‑ $224,000 25.0%

$225,000 ‑ $249,000 25.0%

$250,000 ‑ $274,000 25.0%

$300,000+ 12.5%

Total Respondents 8

Hedge funds: sales/fundraising and hybrid sales and investor relations Total number of respondents: 55

Base Salary



$150,000 ‑ $174,000 50.0%

$300,000+ 50.0%

Total Respondents 2

Partner

$300,000+ 100.0%

Total Respondents 2

Vice President

$225,000 ‑ $249,000 100.0%

Total Respondents 1

Director/Principal

$150,000 ‑ $174,000 25.0%

$200,000 ‑ $224,000 25.0%

$225,000 ‑ $249,000 25.0%

$300,000+ 25.0%

Total Respondents 4


No Respondents


$100,000 ‑ $124,000 50.0%

$225,000 ‑ $249,000 50.0%

Total Respondents 2

Private equity: sales/fundraising and hybrid sales and investor relations Total number of respondents: 11

Base Salary


Vice President

No Respondents

Director/Principal

< $100,000 50.0%

$250,000 ‑ $274,000 25.0%

$275,000 ‑ $299,000 25.0%

Total Respondents 3


$175,000 ‑ $199,000 100.0%

Total Respondents 1


$200,000 ‑ $224,000 50.0%

$225,000 ‑ $249,000 50.0%

Total Respondents 2


$225,000 ‑ $249,000 66.7%

$250,000 ‑ $274,000 33.3%

Total Respondents 3

Partner

No Respondents

Real estate: sales/fundraising and hybrid sales and investor relations Total number of respondents: 9

Base Salary


Hedge Fund

$100,000 ‑ $124,000 10.0%

$125,000 ‑ $149,000 10.0%

$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%



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

Real Estate

$175,000 ‑ $199,000 50.0%

$200,000 ‑ $224,000 50.0%

Total Respondents 2

Investor relations functionTotal number of respondents: 22

Traditional Asset Manager (independent)

$150,000 ‑ $174,000 100.0%

Total Respondents 1

Multi - Product Asset Manager (independent)

$150,000 ‑ $174,000 50.0%

$175,000 ‑ $199,000 50.0%

Total Respondents 2

Traditional Asset Manager (bank owned)

$125,000 ‑ $149,000 100.0%

Total Respondents 1

Multi - Product Asset Manager (bank owned)

$125‑149k 100.0%

Total Respondents 1

Base Salary


$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%


Product specialist function: all firm types and levelsTotal number of respondents: 13

$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%


Consultant relations function: all firm types and levelsTotal number of respondents: 54

Base Salary


Placement Agents: all firm types and levelsTotal number of respondents: 17

< $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%


Base Salary


Traditional asset managers: sales/fundraising and hybrid sales and investor relationsTotal number of respondents: 37

Bonus

Vice President

< $99,000 66.7%

$100,000 ‑ $199,000 33.3%

Total Respondents 3

Director/Principal

$100,000 ‑ $199,000 12.5%

$200,000 ‑ $299,000 37.5%

$300,000 ‑ $399,000 12.5%

$800,000 ‑ $899,000 12.5%

$1,100,000 ‑ $1,199,000 12.5%

$1,200,000 ‑ $1,299,000 12.5%

Total Respondents 8


< $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%



< $99,000 14.3%

$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 7


< $99,000 20.0%

$200,000 ‑ $299,000 20.0%

$300,000 ‑ $399,000 20.0%

$1,000,000 ‑ $1,099,000 40.0%

Total Respondents 5

Partner

No Respondents

Bonus


Multi-product asset managers: sales/fundraising and hybrid sales and investor relations Total number of respondents: 72

Vice President

< $99,000 23.5%

$100,000 ‑ $199,000 29.4%

$300,000 ‑ $399,000 17.7%

$500,000 ‑ $599,000 11.8%

$800,000 ‑ $899,000 5.9%

$1,000,000 ‑ $1,099,000 5.9%

No bonus paid (unemployed) 5.9%


Director/Principal

$100,000 ‑ $199,000 15.4%

$200,000 ‑ $299,000 15.4%

$300,000 ‑ $399,000 23.1%

$400,000 ‑ $499,000 7.7%

$500,000 ‑ $599,000 15.4%

$700,000 ‑ $799,000 15.4%

$800,000 ‑ $899,000 7.7%



$100,000 ‑ $199,000 15.4%

$300,000 ‑ $399,000 7.7%

$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%



Less than $99,000 15.4%

$100,000 ‑ $199,000 15.4%

$200,000 ‑ $299,000 15.4%

$300,000 ‑ $399,000 23.1%

$400,000 ‑ $499,000 7.7%

$1,200,000 ‑ $1,299,000 7.7%

$1,300,000 ‑ $1,399,000 7.7%




< $99,000 7.1%

$100,000 ‑ $199,000 21.4%

$200,000 ‑ $299,000 7.1%

$300,000 ‑ $399,000 14.3%

$400,000 ‑ $499,000 21.4%

$500,000 ‑ $599,000 7.1%

$800,000 ‑ $899,000 14.3%

$1,000,000 ‑ $1,099,000 7.1%


Partner

< $99,000 50.0%

$1,500,000 ‑ $1,599,000 50.0%

Total Respondents 2

Bonus


Hedge funds: sales/fundraising and hybrid sales and investor relationsTotal number of respondents: 55

Vice President

< $99,000 50.0%

$300,000 ‑ $399,000 50.0%

Total Respondents 2

Director/Principal

< $99,000 12.5%

$100,000 ‑ $199,000 6.3%

$200,000 ‑ $299,000 18.8%

$300,000 ‑ $399,000 18.8%

$400,000 ‑ $499,000 6.3%

$500,000 ‑ $599,000 6.3%

$600,000 ‑ $699,000 6.3%

$700,000 ‑ $799,000 6.3%

$800,000 ‑ $899,000 6.3%

$1,000,000 ‑ $1,099,000 6.3%




$300,000 ‑ $399,000 60.0%

$400,000 ‑ $499,000 20.0%

$800,000 ‑ $899,000 20.0%

Total Respondents 5


< $99,000 12.5%

$100,000 ‑ $199,000 12.5%

$300,000 ‑ $399,000 12.5%

$400,000 ‑ $499,000 12.5%

$500,000 ‑ $599,000 12.5%

$800,000 ‑ $899,000 12.5%

$1,000,000 ‑ $1,099,000 12.5%

$3,000,000 ‑ $3,499,000 12.5%

Total Respondents 8

Partner

$200,000 ‑ $299,000 14.3%

$600,000 ‑ $699,000 14.3%

$1,000,000 ‑ $1,099,000 14.3%

$1,100,000 ‑ $1,199,000 28.6%

$1,800,000 ‑ $1,899,000 14.3%


Total Respondents 7


< $99,000 5.9%

$100,000 ‑ $199,000 11.8%

$200,000 ‑ $299,000 11.8%

$400,000 ‑ $499,000 5.9%

$500,000 ‑ $599,000 5.9%

$700,000 ‑ $799,000 11.8%

$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%



Bonus


Private equity: sales/fundraising and hybrid sales and investor relations Total number of respondents: 11

Vice President

$100,000 ‑ $199,000 100.0%

Total Respondents 1

Director/Principal

$200,000 ‑ $299,000 25.0%

$300,000 ‑ $399,000 25.0%

$400,000 ‑ $499,000 25.0%

$600,000 ‑ $699,000 25.0%

Total Respondents 4


< $99,000 50.0%

$500,000 ‑ $599,000 50.0%

Total Respondents 2


No Respondents


< $99,000 50.0%

$300,000 ‑ $399,000 50.0%

Total Respondents 2

Partner

$300,000 ‑ $399,000 50.0%

$1,800,000 ‑ $1,899,000 50.0%

Total Respondents 2

Bonus


Real estate: sales/fundraising and hybrid sales and investor relationsTotal number of respondents: 9

Vice President

No Respondents

Director/Principal

< $99,000 50.0%

$200,000 ‑ $299,000 25.0%


Total Respondents 3



Total Respondents 1


$100,000 ‑ $199,000 100.0%

Total Respondents 2


< $99,000 33.3%

$300,000 ‑ $399,000 33.3%

$1,000,000 ‑ $1,099,000 33.3%

Total Respondents 3

Partner

No Respondents

Bonus


Investor relations functionTotal number of respondents: 22

Hedge Fund

$100,000 ‑ $199,000 20.0%

$200,000 ‑ $299,000 30.0%

$400,000 ‑ $499,000 10.0%

$700,000 ‑ $799,000 10.0%




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

Real Estate

$100,000 ‑ $199,000 50.0%

$200,000 ‑ $299,000 50.0%

Total Respondents 2

Traditional Asset Manager (independent)

< $99,000 100.0%

Total Respondents 1

Multi - Product Asset Manager (independent)

$300,000 ‑ $399,000 100.0%

Total Respondents 2

Traditional Asset Manager (bank owned)

$100,000 ‑ $199,000 100.0%

Total Respondents 1

Multi - Product Asset Manager (bank owned)

$100,000 ‑ $199,000 100.0%

Total Respondents 1

Bonus


Product specialist function: all firm types and levelsTotal number of respondents: 13

< $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%


Consultant relations function: all firm types and levelsTotal 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%




Bonus


Placement agents: all firm types and levelsTotal number of respondents: 18

< $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%



Bonus


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

0%

20%

40%

60%

80%

100%

120%

0%

5%

10%

15%

20%

25%

30%

$300

,000

+

$275

,000

- $2

99,0

00

$250

,000

- $2

74,0

00

$225

,000

- $2

49,0

00

$200

,000

- $2

24,0

00

$175

,000

- $1

99,0

00

$150

,000

- $1

74,0

00

$125

,000

- $1

49,0

00

$100

,000

- $1

24,0

00

<$10

0,00

0

Not

cur

rent

ly e

mpl

oyed

MBA Bachelors


Bonus

0%

20%

40%

60%

80%

100%

120%

0%

5%

10%

15%

20%

25%

30%

$4,0

00,0

00+

$3,5

00,0

00 -

$3,5

99,0

00

$3,0

00,0

00 -

$3,4

99,0

00

$2,5

00,0

00 -

$2,9

99,0

00

$2,0

00,0

00 -

$2,4

99,0

00

$1,9

00,0

00 -

$1,9

99,0

00

$1,8

00,0

00 -

$1,8

99,0

00

$1,7

00,0

00 -

$1,7

99,0

00

$1,6

00,0

00 -

$1,6

99,0

00

$1,5

00,0

00 -

$1,5

99,0

00

$1,4

00,0

00 -

$1,4

99,0

00

$1,3

00,0

00 -

$1,3

99,0

00

$1,2

00,0

00 -

$1,2

99,0

00

$1,1

00,0

00 -

$1,1

99,0

00

$1,0

00,0

00 -

$1,0

99,0

00

$900

,000

- $9

99,0

00

$800

,00 0

- $8

99,0

00

$700

,000

- $7

99,0

00

$600

,000

- $6

99,0

00

$500

,000

- $5

99,0

00

$400

,000

- $4

99,0

00

$300

,000

- $3

99,0

00

$200

,000

- $2

99,0

00

$100

,000

- $1

99,0

00

Less

than

$99

,000

No

bonu

s pai

d (e

mpl

oyed

)

MBA Bachelors


Track record of cultivating long-term relationships within key client channels or geographies

Considers investors’ needs holistically; o�ers solutions rather than a product-centric sales approach

Entrepreneurial by nature; passionate about building and growing the business

Demonstrates patience, calm and commitment to outstanding service during client interactions

Willing to serve as a mentor

Straight shooter; communicates without spin, evasiveness or excessive storytelling

Proactive and transparent communication during periods of fund underperformance or key-person changes

Combines strong strategic ability with tactical skills in approaching the market

Superior written, verbal and interpersonal communication skills; able to present with con�dence and in�uence

Strong academics including MBA and / or CFA

Quanti�able track record of raising capital successfully throughout di�erent economic cycles

Highly responsive; provides thoughtful, substantive and consistent follow-up

Strong work ethic and competitive spirit coupled with good sportsmanship and collaboration

Communicates with genuine passion, energy and excitement

Willing and able to discuss products and solutions beyond a speci�c product o�ering

Able to articulate and position complex strategies e�ectively to a range of investors and consultants

Demonstrates ownership and self-awareness around missteps and lessons learned from the experience

Serves as a calm, trusted advisor during challenging times

Great judgment about leveraging the investment team(s)

Professional behavior; consistently demonstrates strong values in business as well as social settings

Demonstrated loyalty and tenure throughout their career

Culture �t

Able to master a speci�c product o�ering as well as understand a �rm’s full range of capabilities across strategies

Demonstrates respect for investors’ time; skilled at running meetings e�ciently, communicating concisely and listening

Career history of growth and success in roles of increased complexity and responsibility

Manages expectations, communicates proactively, meets deadlines

Willing to address di�cult situations proactively

Analytical / technical depth

Long-term focus on building trust, respect and credibility with investors

Agile thinker; able to adapt quickly and calmly to shifting priorities and demands

Truly collaborative and team-oriented

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 pro�le- Heidrick & Struggles interview observations


Emerging Trends for 2014 and BeyondSurvey 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.


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.


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.



Associate 0.4% 2







Partner 8.2% 37






5 - 10 5.1% 25

11 - 15 21.0% 103

16 - 20 24.0% 118

21 - 25 27.5% 135

26+ 22.4% 110




5 - 10 30.8% 150

11 - 15 28.1% 137

16 - 20 22.2% 108

21 - 25 13.3% 65

26+ 5.5% 27



Where do you work?


New York 53.3% 233

Connecticut 7.1% 31

Boston 9.6% 42

Chicago 12.1% 53


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



How would you characterize your current firm?


Traditional Asset Manager (independent) 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




Real Estate 5.1% 23

Placement Agent 5.9% 27

OCIO 2.2% 10






Long-Only Equity 51.1% 242

Long-Only Fixed Income 44.5% 211










If your firm is a hedge fund, what is its primary investment strategy?


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






<$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







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







Yes 50.1% 190

No 49.9% 189



Our Global Team

Americas

David Morris Houston

Carla Ormsbee Mexico City

Chad Astmann New York

Elisabetta Bartoloni New York

Jeannie FinkelLos Angeles

Paul Gibson New York

Amy Goldfinger New York

Jonathan Goldstein New York

Renee Neri New York

Liz Simpson New York

Laurie Thompson New York

Paul Charles San Francisco

Lee Hanson San Francisco

Rose Baker Toronto

Daniel Edwards Washington, D.C.

Jean AllenNew York

Our Expertise:

• Senior leadership

• Investment professionals

• Fundraising

• Risk

• Compliance

• Technology & operations

• Investor relations

• Communications

• Human resources

• Legal

• Emerging Markets

Our Clients:

• Hedge funds

• Private Equity

• Real Estate

• Traditional Asset Managers

• Insurance

• Endowments

• Foundations

• Pension Funds

• OCIO

APACAlexandra Goodfellow Sydney

Anthony Bi Beijing

Keir Macintosh Hong Kong

Steven McCrindle Hong Kong

Lisa Wong Hong Kong

Puneet Singh Mumbai / New Delhi

Jaeho Kim Korea

Linda Zhang Shanghai

Michael Di CiccoSingapore

Christoffer BlackTokyo

Aya IinumaTokyo

Fergus KielSydney

EMEA

David Harms London

Charlie Kershaw London

Andy Smith London

Tom BucketLondon

Richard ThackrayLondon

Pilar Santiago Madrid

Raed SaterDubai

Shadi El Farr Dubai

Lawrence TrefiParis

Sophie LandaleParis

Viviana LandoniMilan

Heidrick & Struggles is the premier provider of senior-

level Executive Search, Culture Shaping and Leadership

Consulting services. For 60 years, we have focused on

quality service and built strong leadership teams through

our relationships with clients and individuals worldwide.

Today, Heidrick & Struggles’ leadership experts operate

from principal business centers globally.

www.heidrick.com

Copyright ©2013 Heidrick & Struggles International, Inc.

All rights reserved. Reproduction without permission is

prohibited.

Trademarks and logos are copyrights

of their respective owners.

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