New York / June 27, 2007 – Alternative investment houses continue to lead the way for compensation among risk managers in asset management, according to a new professional compensation survey by Risk Talent Associates, a leading risk management executive search firm. Overall, compensation grew 17% in 2006 over 2005, driven by steeper growth rates at alternative investment houses as well as sturdy growth in traditional asset management and insurance. The differences in total compensation between these segments are relatively minor among junior and mid-level positions, and more pronounced in the senior ranks when positions in alternative investments offer much more lucrative bonuses than in traditional asset management or insurance.
While salary, cash and non-cash bonuses levels increase commensurate with both experience and seniority, peaking at over $1.2 million USD in total compensation for chief risk officers in alternative investments, the survey reveals high growth rates for those with 7-15 years experience and at junior level positions. Michael Woodrow, president and founder of Risk Talent Associates comments that “this is in response to the accelerated expansion of risk management teams across the board, where exceptional trading and business skills are earning top dollars.”
Twenty-two percent of survey respondents report changing jobs in the past two years, and 21% predict changing jobs in the next two years. This is a much more balanced rate compared to the capital markets, where Risk Talent Associates reported earlier this year that 27% will change jobs, a full 10% more than the number who changed jobs in that sector in the previous two years.
These trends are likely to continue throughout the coming year as 44% of survey respondents expect their risk management teams to grow. Of note, not a single hedge fund, fund of funds or insurance company predicted their team will reduce its risk management staff in 2007. Woodrow adds that “we see across the board strength in hiring in the asset management sector – in the traditional, insurance and alternative segments. Firms continue to market their risk management capabilities to their clients, who have become more sophisticated in evaluating an asset manager’s ability to manage risk. Sound risk management has become a key marketing point as asset managers seek to grow/gather assets.”
To build their risk management teams, over 60% of respondents report using more than one source to find talent. Trends vary by firm, with traditional asset managers and insurance executives most likely to leverage internal recruiting, corporate staffing or human resources. Alternative investment managers are more likely to use contingency recruiting firms.
Risk Talent Associates compensation surveys have been published in 2007 for capital markets and asset management. Other surveys to be published this year will cover risk professionals in financial compliance, as well as the energy, consulting, software and corporate sectors.
About Risk Talent Associates
Risk Talent Associates (www.risktalent.com) is the leading international executive search firm focused exclusively on positions in the fields of market, credit and operational risk, as well as financial compliance and risk technology. Risk Talent’s expertise, industry knowledge, proprietary network and dedicated focus shorten the recruiting process to deliver senior and mid-level risk managers in the capital markets, asset management, energy, consulting and software industries. Risk Talent has offices in New York, Chicago, London, and Hong Kong.
Risk Talent Associates