2024 Hiring Forecast

Balance has returned to distribution recruiting for 2024, with healthy (yet more measured) anticipated hiring levels being reported compared to 2023 and a good number of high quality/compelling opportunities in the market.

Challenges for hiring firms include already high turnover levels, an incredibly challenging fundraising environment (amplifying the risks of a mis-hire), and enticing top performers to consider a move.

Firms looking to attract “A-players” within competitive strategies will need to level up their interview process in terms of both screening, Guide to Evaluating Capital Raising Professionals and selling, i.e. creating and communicating as compelling of an opportunity as possible to attract the best caliber candidates.

Key findings from Willow Hill’s recent report, based on a survey of 95 distribution team leaders, November, 2023.

*Please find the full report here: Institutional Fundraising & Investor Relations: 2023 Compensation and 2024 Hiring Forecast

• Similar to last year, North American firm types with the strongest anticipated active recruiting levels for 2024 include multi-product alternatives managers (20%) and private credit (42%).
• Consistent with prior years, the most robust recruiting in 2024 is anticipated to be for the fundraising / sales function, with 37% of respondents anticipating their firms hiring in the function next year. This is down only slightly from 2023 (42%).
• The biggest decrease in anticipated hiring is for client-facing investor relations roles (just 11% of respondents expected to hire for this function in 2024 as compared to 22% for 2023).
• While competition for top-performing talent remains strong, anticipated 2024 hiring levels for distribution professionals overall has noticeably softened compared to 2023.
• 13% of respondents anticipated their firms would be actively recruiting distribution talent in North America in 2024 as compared to 27% in 2023.
• When asked about their hiring plans in the UK and Europe, 10% of respondents anticipated active recruiting in 2024 compared to 17% in 2023. In Asia, active recruiting levels stayed relatively flat year over year.
• The majority of distribution teams in North America are expected to either remain flat (52%) or opportunistically meet potential candidates (27%) in 2024. When asked the same question last year, 39% expected their teams to remain flat and 25% anticipated opportunistically meeting candidates.
• Surprisingly, North American diversified asset managers (as characterized by offering both traditional and alternative products) showed the sharpest decline in active recruiting (0% of respondents for 2024 compared to 43% for 2023).
• Following a strong 2023, active recruiting in private equity is expected to slow for 2024 with zero respondents expecting to actively recruit and only 14% meeting candidates opportunistically; 72% of private equity respondents expect their distribution teams will remain flat.
• Most opportunistic hiring for private equity is expected to happen in fundraising/sales or non-client-facing investor relations roles.

Anecdotally, I believe recruiting for fundraising talent remains tricky and the cost of a mis-hire is now even more expensive; beyond the time and financial expense of recruiting, there is real opportunity cost to having an underperformer in this seat during a challenging fundraising environment.

High levels of opportunistic interviewing indicate a desire on the part of investment management firms to maintain optionality in uncertain markets as well as an openness to upgrading existing talent.

2023 was one of the most challenging fundraising periods on record. In addition to market pressure, high turnover rates in recent years means that many high performers are just now experiencing meaningful traction after 1-3 years of enormous effort.

A-players who are successfully raising capital at the moment will be extremely measured around entertaining a new opportunity, assuming they perceive their contribution is valued and appreciated by their current firm.

Compensation is just one manifestation of value and appreciation: Beyond Compensation: Headhunter Proof Your Team

Other signals include respect, support (from above and below), investment in building an institutional quality effort, credit assigned appropriately, investment professionals who are receptive to coaching and willing to spend time with LPs, and senior leadership who “gets” the fundraising process and demonstrates patience and appreciation for the timeline and resources required.

Whichever side of the table you're on, happy hunting and best wishes for a successful 2024!

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Please don't hesitate to reach out as you're contemplating the year ahead. You can also find additional AMAs and reports here: https://willowhilladvisors.com/thought-leadership/

From vetting talent, taking on a leadership role, dealing with headhunters, orchestrating a graceful exit, considering a counteroffer, mending professional relationships to hearing LPs dish on best (and worst) practices of marketers, I've got you covered.

A former boss once quipped “Laurie’s directness can be a surprise to the uninitiated.”

Welcome to Ask Me Anything. Consider yourself initiated!

As always, feedback, questions and topic suggestions are welcome and appreciated.

~ Laurie

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About Willow Hill Advisors

Laurie Thompson founded Willow Hill in September 2019 after spending 16 years in the financial services practice of Heidrick & Struggles. She has placed fundraising and investor relations professionals from the Partner, Head of Global Distribution level through Associate, with a concentration on senior-level hires. Clients (hiring firms) are predominately top-tier alternative investment managers.

Willow Hill is exclusively a retained firm and executes only a select number of mandates at a time, ensuring hiring firms receive the highest level of focus and attention. Through deep market knowledge, long term relationships and established trust, Willow Hill provides unconstrained access to top caliber talent while ensuring potential placements are thoroughly vetted and referenced.