Asset management has been one of the best performing sectors for financial services headhunters over the past year. Many firms whose investment banking businesses have been devastated are relying on their asset management teams to help them through the economic downturn.
Increasing interest shown by fund managers in winning business in Germany, Italy and other European countries has kept the sector reasonably buoyant, together with a growing need for client-facing roles within the industry. A rapid increase in the numbers and size of hedge funds has also created plenty of work for recruiters.
Karin Barnick, head of the investment management practice at Baines Gwinner, says: 'Many headhunters have been looking to hire more asset management specialists this year. The market is not merely holding up well at the moment - it has a good long-term future as well.'
Barnick says that much of the momentum is coming from continental Europe, where governments have decided that they must encourage people to save for private pensions in their old age.
James Marlar, of the headhunter Marlar Bennetts, says: 'The main players are trying to access European assets. This has put a high price on the heads of speakers of German, French, Italian and other languages and demand is outstripping supply.'
Willem Dudok de Wit, the head of the asset management team at Principal Search, says: 'There are 200 million people in Europe walking round without adequate pension provisions and fund managers have certainly noticed.'
Other parts of the world also offer opportunities. Zak Allom, of the recruitment firm Leader Financial Research, says there is demand for Mandarin speakers in East Asia, while the Middle East is another potential source of funds because of the number of wealthy individuals there.
Not everyone is so impressed by the prospects in foreign markets, however, at least not in Europe. Giles Crewdson, of the headhunter Korn/Ferry, says: 'The love affair with continental Europe has been going on for 20 years and it still hasn't come to fruition. Governments are still dragging their feet on essential reforms that would unlock domestic savings markets to wider competition.' He adds that Italy is an exception. 'At least in Italy, there is a high rate of savings and the government has been more favourable to opening up the market.'
But Crewdson says that the refusal of the European parliament in July to approve a law to harmonise company takeovers across the EU was a setback, as it contributed to a climate of reluctance to embrace reform.
If Europe fails to be the promised land that everyone hopes, Crewdson says there are plenty of roles in the fund management industry overall where demand is strong.
Product managers and business managers are increasingly sought after, he says. Asset managers are also hiring more of their own research teams, partly because they feel sellside researchers are not always objective, and partly to demonstrate to clients that their fees are spent on something useful.
On the downside, says Crewdson, fund managers are showing less need than before for transaction specialists, partly because of improvements in IT. He adds that for all types of position, fund managers have become very cost conscious the sector has by no means escaped the downturn altogether.
Barnick of Baines Gwinner says that she has noticed a particular demand for customer relationship managers. 'Fund manager roles have become more defined. There is also a huge demand for managerial ability,' she says. She adds that credit specialists are also prized, as demand for fixed-income products has held up well.
The rise of hedge funds has also presented asset management recruiters with plenty of opportunities.
Dudok de Wit at Principal Search says: 'Alternative and leveraged funds will be a growing part of our work, especially if interest rates stay low and the outlook for stocks stays uncertain.'
Headhunter Oliver Stanley at Armstrong International also sees hedge funds as a growth area. 'We have a dedicated hedge fund practice and we have seen plenty of interest in the sector from candidates and clients,' he says.
Headhunters say that traditional asset management firms have been taken aback by the stampede of many of their star performers into hedge funds. The attractions are more excitement and better pay.
In some cases they have reacted by setting up hedge funds themselves in order to keep their best staff, and they have adjusted their pay structures for employees in more traditional jobs too.
Long-term incentive schemes, shares and share options are among the measures being introduced, says Barnick. Asset managers are also linking pay more closely to fund performance than in the past.
Some recruiters are wary of the hedge fund boom. One said that fund managers with plenty of experience of traditional investments were arriving at hedge funds full of confidence, and then getting their fingers burnt when they got involved in leveraged and short positions that they knew little about.
Marlar of Marlar Bennetts says that fund management overall is now attracting a number of investment bankers, often in client-facing roles.
'They see good opportunities to develop their careers, both with institutional funds and on behalf of high net worth individuals. They are good raw material, as they are relationship driven,' he says.
A spate of mergers and acquisitions in the asset management industry has led to job losses in recent months. These have partly offset the gains in continental European activity and the demand from hedge funds.
A report by PricewaterhouseCoopers, the consultancy, says that one third of fund managers in the UK might make a loss this year. This can hardly be good news on the recruitment front. Nevertheless, headhunters are looking towards next year with cautious optimism.