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Around a fifth of new hires at GSAM since 2008 joined from investment banks, its Global co-chief executive
The shift from investment banking, traditionally seen as first career choice for top talent due to its higher pay, has coincided with rising demand from fund firms for the specialist corporate knowledge that investment bankers typically have.
Ms. Patel said GSAM has increased staff by 25 percent in the two years following the financial crisis.
“We found people with a very high caliber that wanted a change or saw how things were going on in their own organizations that made them uncomfortable or worried for their stability,” Ms. Patel told Reuters in an interview, recalling “a lot of incoming resumes.”
Operating from 29 locations globally, GSAM is one of the world’s largest investment houses with
While recruitment was likely to slow as it integrated new staff, Ms. Patel said the trend of investment bankers taking asset management roles would continue as buy-side clients demanded more from the teams charged with growing and protecting their money.
“(Asset management) is a very different business than it was 10 years ago, there’s such an advisory component to it, and such a need to understand the underlying (corporate) fundamentals. That requires a lot of different thinkers,” said Ms. Patel, who joined GSAM after a stint as co-head of Goldman’s Asian equity sales.
“It may well be that the right person on the ground to help our insurance clients from an asset management perspective is someone who has been their investment banker for 10 years,” she added, flagging a common need to streamline the asset management strategies of companies formed following several takeovers.
Moving bankers into asset management could help
Former Goldman star traderhas left the bank to launch his own hedge fund group, following colleague.
But J.P.Morgan is seen weighing a plan to reassign affected staff to its asset management division, a move that is likely to appeal to those bankers seeking greater job security and clearer pay prospects within an established institution.
Fund managers face pressure from tighter regulations, being introduced in response to the financial crisis, which add to the costs of doing business, while investors are simultaneously demanding lower fees.
“I do think that the pressure on fees is a little faster than the costs coming down per se, in terms of launching or supporting a broad range of products. On the other hand, it forces us all to be disciplined,” Ms. Patel said.
One area of focus for GSAM is emerging markets with
With emerging markets allocations now firmly embedded in portfolios, Ms. Patel believes investors are now less likely to stampede for the exits at times of political trouble or market volatility.
“…You don’t see the reallocation you might have seen 10 or 20 years ago, from 100 pct to 0. You see tweaks.”