Managers cautiously optimistic about 2022

Money managers of all sizes are nervous about what industry pundits say is the industry’s hottest-ever talent war.

“Money managers are very optimistic about 2022, but also are very concerned about retention and recruitment because the hiring environment is so competitive right now,” said Alan Johnson, managing partner at Johnson Associates Inc., New York, a compensation advisory firm.

“2021 was a remarkably good year and bonuses will be higher. There may be a wave of departures after 2021 bonuses are awarded in January and February,” he added.

The firm estimates that 2021 bonuses will average 15% higher than in the prior year and Mr. Johnson said managers have revised their pay scales upward to win over candidates.

He also highlighted the scarcity of diverse candidates, noting that “there aren’t many diverse candidates and few are available,” despite many managers placing a bigger emphasis on diversifying their employee ranks.

One manager that had a successful recruitment year in 2021 was Capital Group Cos., Los Angeles.

Recruitment overall was strong, including for diverse candidates, said Ralph E. Haberli, head of institutional retirement.

“Capital has a lot of long-tenured employees so we made it a point to bring in new people to add both thought diversity and people from underrepresented minorities and gender,” Mr. Haberli said.

Capital Group managed $2.6 trillion as of Sept. 30.

Turnover at SSGA in the U.S. was very low in 2021 and “we are not seeing the Great Resignation yet,” Ms. Heinel said, adding that SSGA hired more diverse candidates than non-diverse employees last year.

Goldman Sachs is “very focused on bringing in diverse talent. It’s what our (limited partners) and investors want,” Ms. Miner said, adding that more than 50% of the portfolio managers running Goldman Sachs’ fundamental equity strategy are women.

Like many money managers, Goldman Sachs is actively seeking to recruit hundreds of “best-in-class engineers to help us better engage with investors and build out the technology needed for blockchain and tokenization,” Ms. Miner said.

The Vanguard Group Inc., Malvern, Pa., describes itself as a technology-first company and this year is investing in technology that will help defined contribution plan sponsors and participants be more engaged with their investments through access to both digital and human advice, said John James, managing director and head of the firm’s institutional investor group.

“We’ve been talking about this with plan sponsors and it’s their biggest demand. The program will be our biggest focus,” Mr. James said, adding that the advice program likely will attract more defined contribution plan employers, and as a result, participants to company 401(k) plans.

Vanguard managed $8.2 trillion as of Nov. 30.

Money managers are optimistic about their businesses in 2022, albeit wary of potential ravages from inflation and lower equity allocations.

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