Why Private Equity Shops and Hedge Funds are Boosting their Wealth Management Hires
Financial advice firms looking to boost their advisor ranks may now have to compete with alternative asset managers looking to get into the retail investment sector, according to news reports.
Private equity and private debt firms and hedge fund providers are increasingly interested in growing their wealth management operations, Sasha Jensen, CEO of executive search firm Jensen Partners, tells Institutional Investor.
“Funds are looking at how to tackle the whole area of RIA and private wealth,” she tells the publication. “It’s an enormous area of potential that they’re trying to wrap their arms around.”
For now, the number of wealth management hires by alternative asset managers remains small -- Jensen Partners only found eight such moves in the first quarter of 2019 out of 262 moves among alternative marketing and fundraising staff -- but it was enough to prompt Jensen Partners to begin tracking wealth management hires in the alternatives sector for the first time, Institutional Investor writes. And Jensen tells the publication that conversations with her firm’s clients suggest that the hiring rate will increase in the second quarter.
“Before wealth management was really a retail space but it’s becoming more institutional,” she says, according to Institutional Investor. “Family office founders, hedge fund founders, private equity founders — they have an enormous amount of cash they can put to work, and they’re looking for diversification.”
AQR Capital Management is just one example of alternative asset managers that have already entered into retail distribution, Jensen tells the publication.