2009 Hiring Trends: Fixed Income

Hiring across all areas of Fixed Income Investing (including Product Management) was 48% lower from January to October 2009 than over the same period in 2008.

Hiring figures for October across Fixed Income Investing were flat on October 2008 - though that is because, following the collapse of Lehman Bros in September 08, there had anyway been an 83% fall in hiring in October 08 when compared against October 07; so last October set a low benchmark. Given that, over the course of last year, hiring fell overall by 44%, we are now talking about very low levels of hiring when adding this year's further fall of 48%. In fact, monthly hiring totals have been the lowest that we have recorded since Godliman started keeping these records in 2001.

The same picture has been seen on both the Equity Investing side and in Institutional Sales & Client Servicing- though it is fair to say that demand in the Institutional Sales area has picked up in the third quarter of 2009, whereas demand in both Fixed Income and Equity Investing remains flat.

Hiring this year has been mainly focused in lower risk, defensive asset classes, such as Investment Grade Credit (comprising 39% of all hiring); Rates (9%); and Currency (8%). Demand for higher alpha areas has fallen away sharply with very little going on in Emerging Markets Debt (1%) and High Yield Credit (5%). There has recently been some increase in hiring of Investment Grade Credit Fund Managers, with a number of firms in London and Edinburgh currently searching. These positions will probably be closing before the Christmas break, and the candidates will turning up in their new positions over the first quarter of 2009. So we are expecting a small increase in reported hiring volumes in early 2009.

Overall, though, we do not get the impression that there will be significant adding of headcount in early 2009 - unlike the trend in Institutional Sales side, where deman has increased. This is probably because investment teams are more scalable than sales teams and so, even if fund inflows do start increasing, most firms can probably make do with the resources they already have for the foreseeable future. Assuming we continue to see markets recover, continuing inflows will probably build pressure on hiring demand in the third quarter of 2010. But we do not see any evidence for a strong resumption of hiring demand in Fixed Income before then.

Two other trends we have noticed over 2009 are:

• a slight increase in the seniority of hiring, with underperforming firms bringing in new management teams to turn things around. Hence hiring at the managerial level has increased from historical levels of around 14%, to 21% of all hiring in 2009;
• a decrease in hiring of Credit Analysts. With the exception of demand for Financials Analyst, where there has been some movement, overall demand for analysts has fallen from historical levels of around 25%, to 15% of all hiring in 2009. We feel there is now a debate on the value of having large teams of Investment Grade sector analysts. Most firms assembled large teams only to find that narrowing spreads made it impossible for them to deliver any alpha; and benchmark-driven investors later found their analysts didn't even protect them from credit blowups. Our feeling is therefore that firms may move to having smaller teams of analysts responsible for 'best trade' ideas on a more generalist basis, with a view to delivering alpha. But this debate is still ongoing.

There has also been very little demand for Fixed Income Product Managers: presumably as this is an area where one can squeeze extra work out of the existing team and therefore extra headcount can be deferred.

Our prognosis is that hiring in Fixed Income will recover slowly next year - probably not until the third quarter. Providing markets continued to recover, we expect that hiring will move up the risk curve into higher alpha asset classes such as Emerging Markets, High Yield and Absolute/Total Return type products.

Key hiring Houses in 2009

Aviva, Aberdeen, Alliance Trust, Gartmore, Henderson, Legal & General and Scottish Widows, which have all hired between three and eight people. A further 8 houses have hired two people.

In addition, there have been a number of significant senior hires, including:

In November:

• James Taylor joins Scottish Widows Investment Partnership as Head of Rates.
• Andrew Tunks joins Scottish Widows Investment Partnership as Interim Head of Fixed Income.
• Robert Stewart joins Rothschild Private Bank as Head of Fixed Income.

In September:

• Dinesh Pawar joins Aviva Investors as Head of Flow Trading for Credit.

In August:

• Pierre-Yves Bareau joins JP Morgan Asset Management as Head of Emerging Market Debt.
• Andrew Belshaw joins Western Asset Management as Head of UK & Euro Rates.

In June:

• Bob Arends joins Henderson Global Investors as Head of Currency.
• Jeff Keen joins JO Hambro Asset Management as co-Head of Fixed Income.
• Jeff Burch joins Investec Asset Management as Head of Credit.
• Didier Haenecour joins Vanguard Asset Management as Head of Passive Fixed Income.

In May:

• Jon Cunliffe joins Aberdeen Asset Management as co-Head of UK Rates.
• Nick Griffiths joins Aberdeen Asset Management as co-Head of UK Rates.
• Mark Wauton joins Aviva Investors as Head of Credit.
• Clive Dennis joins Schroder Investment Management as Head of Currency.
• Dipankar Shewaram joins Western Asset Management as Head of non-US Credit

In April:

• Benno Weber joins Swisscanto Asset Management as Head of Fixed Income.
• Ganesh Rajendra joins Henderson Global Investors as Head of Advisory and Research for Structured Products.

In March:

• Michael Heemelaar joins F&C Asset Management as Head of Global Credit.
• John Anderson joins Gartmore Investment Management as Head of Credit.
• Kam Tugnait joins Gartmore Investment Management as Head of High Yield.

In February:

• Paul Griffiths joins Aberdeen Asset Management as Head of Fixed Income.
• Richard Wisentaner joins Mitsubishi UFJ Asset Management as Head of Global Credit.

In January:

• Bob Arends joins Henderson Global Investors as Head of Currency.
• Stewart Cowley joins Old Mutual Asset Managers as Head of Fixed Income.
• Antonio di Flumeri joins Clarent Capital Partners as Head of Credit.

For more detailed information on the Fixed income Investing area, including hiring data and salary trends, as well as competitor team structures across the EMEA Region, please call Rupert Reed on 020 7183 8864

• Buy Side Fixed Income Hiring Trends for 2009
  Click on the link for five charts showing hiring figures for Fixed Income in 2009

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