2025 has posed many challenges for the hedge fund industry. You would have thought that following 2024 where they say that half of the world went to vote, that this year would accelerate hiring needs following quite a vanilla year of recruiting in 2024. Whilst 2025 has been certainly been more buoyant, it is fair to say that attracting talent comes with higher salary costs and more competition for the standout individuals.
We have seen most businesses try to make good of the staff they have, investing in automations and improving efficiencies with the added the buzz of AI sweeping across the industry. To top it all, there has been a reappointment of President Trump who is doing his best to try and make America great but has caused so much volatility in the markets that most firms have sat on their hands whilst they fathom the potential outcomes. We also have a new government here in the UK, causing financial implications to both individuals and businesses, and not forgetting a much-delayed budget announcement adding to uncertainty.
When there is so much volatility in the markets, the experienced Portfolio Managers and Traders just sit tight and wait for market corrections to take place. The key thought is when do these corrections take place, as volatility is more aggressive these days, especially where trend-following or algorithmic / systematic strategies continue to cause extreme market movements as the computers all jump on the same trend-following curves and duplicate trading patterns. There is a still a sparse number of mergers, acquisitions, and IPOs in the market, meaning the event driven and arbitrage strategies still struggle. It’s Equity Long/Short strategies that have really had it tough, with most becoming more focussed on being long. Hedge Fund Benchmark Indexes have dropped, and some companies are satisfied to hit their High-Water Marks in the current climate and not just aiming for double digit performance like years gone by. But can we blame them given how much market uncertainties there is out there?
Macro funds appear to be the most stable given their ability to change direction when needed, but it is Fixed Income strategies (Private/Public, Open Ended/Closed Ended, Credit, Long/Short) that really continue to rally, and these types of funds are showcasing the better performances in the industry. We are now starting to see Digital Assets becoming more prominent across the sector, both as a fund strategy or being used as a hedging tool (stable coins as example) in a wider Macro strategy. What is for sure is that week by week we could have written something completely different, the markets are moving so drastically that there has been opportunity for some funds out there to be on the right side of the markets. We know of some incredible performances in 2025 and fully expect them to receive accolades in the industry and of course offer noticeable performance related bonuses to their staff soon.
We have held many conversations this past year where smaller funds still struggle to raise assets, but the bigger funds get bigger and bigger. There is still a distinct lack of new fund launches (that are not just pod spinoffs from major funds), and our communication with Prime Brokers and Law firms all show solidarity that there is pipeline of new firms wanting to launch, but many never actually get off the ground given the level of compliance required and the overheads. This is making the use of outsourced support more favourable at the beginning of their journeys, and luckily, we have some well-established relationships in this space.
Outsourced models are becoming far more prominent overall, and many businesses have either already entered agreements or are looking to outsource their back / middle office functions (and potentially their fund accounting services) to major Fund Services providers or platforms that can achieve this. Many of the Fund Service providers have been hiring Business Development talents to help them take more market share, as supposed to just targeting what has historically been a lucrative “new launch” market here in the UK.
We are witnessing growth in the Middle East, where Dubai and Abu Dhabi are starting to attract established firms and offer lucrative tax-free earnings for their staff to help build offices in a new time zone, but with focus on revenue generators or front office staff at this stage. What is encouraging is that we can see this landscape changing dramatically and understand there are many new startup funds and even family offices looking to launch in that region. Compliance professionals are already in demand to make sure they accommodate local regulations, but we expect infrastructure hires in Operations, Middle Office, and Fund Accounting to rally over the course of the next 18months.
At the time of writing this article, the BBC have reported that unemployment is at a high following COVID. There is always a number of redundancies towards the end of the year because most companies start doing the budgets for the following year. But this year it feels much higher than usual, especially for the more experienced employees and likely the most expensive. We are going through a period which I have seen many times in my 22-year career, where businesses want to get rid of the more mature and bring more youthful employees through the door thinking it will be cheaper for them, and to build layers for the future. Where there is a distinct lack of senior roles in the market, it means there are many more senior individuals looking for work and applying for less responsible roles, yet they get overlooked as companies worry, they might be overqualified and treat it only as a stop gap.
The main issue is with salaries for junior hires at such high levels is that when they realise, they then want someone youthful but with the knowledge of someone far more experienced, to potentially justify a higher and unexpected junior price tag. Even if they tend to bring advanced technology skills as standard, and in comparison, to the experienced Operations staff who know how to build robust and enhanced controls to their functions based on experience. When a company has not had to hire in recent times, they are shocked to hear how the landscape has changed in our post-Brexit world, not forgetting the many negative work-ethic questions, expectations, and opinions of the said inexperienced demographic.
What has become more popular for the more experienced staff is the buzz word “Fractional.” Where companies are trying to reduce cost of senior staff salaries, and with many more experienced candidates on the market, fractional roles are becoming more popular with many firms turning to consultants on shorter working week hours to deliver their minimum requirements. We have seen an increase in contracting, permanent fractional or part time opportunities coming to market.
What has not stopped is the sheer demand for junior talent. Even though we still must remind many firms that no graduate schemes were run in 2020 and 2021, making the identification of a candidate with less than 4 years’ experience a near on impossible task. When identified, many have already found new careers given the volumes of hiring at that level over the last couple of years. Not forgetting that the candidates have a kaleidoscope of options to choose from. With the continuous demand for candidates with 3 years’ and under experience, it is obvious that those salaries and total remunerations have increased, making the very junior market lack value because demand is outstripping the supply. You can see the difference in the salary survey data when comparing year on year results. Its flabbergasting how much they can command on average.
External hiring has become expensive. There has been so much hiring in the previous few years that higher salaries have already been paid to attract them, and an incentive needs to be on offer to get them to move again. This means that all levels of experienced hedge fund candidates now come at premium, sometimes to unfathomable levels for their experience, but the demand is there!
What does appear to be an issue is not keeping your current staff in line with comparable market earnings and especially considering the cost-of-living increases. A few hundred pounds increase is just not enough these days, especially when considering the average salary increase to move role/company is now just over £9,000. Internal salaries have fallen behind, disappointingly for those who have remained loyal. The big issue comes when a team loses someone, and they need to replace, then because of the current financial setup in their team, they struggle to find someone with similar experience for the same value as the person leaving. And then when the person leaving tells their team how much more money they have achieved with their new role, well this is when companies start to see a bigger staff turnover and gain a reputation for paying under the market.
Clients’ expectations in search of a perfect CV have not yielded. In fact, it has become harder to convince some hiring managers to meet candidates at times. Whilst strong academics will always remain prominent in the Alternatives sector, it is now very realistic to expect candidates to have programming skills with advanced Excel or VBA as an essential requirement with every job brief. There is still focus on companies using Operations or Middle Office hires to further their expertise of programming skills (VBA, Python, SQL), and use this department as a way of trying to improve processes and enhance efficiencies. However, this is not to be confused with hiring a Quant, which some funds think they can achieve in Operations / Middle Office as a cheaper solution instead of utilising the demanding and buoyant Quant recruitment market. Candidates with this skillset can command 30% higher salaries and have the pick of the more exciting of roles in our sector, as they look to enhance and support their automations, without enduring further expensive resources in their Dev Ops or Quant teams. Not forgetting they could also be contenders for a Quant role simultaneously.
An appreciation for Data is now becoming extremely useful in Operations hiring, especially those who can manipulate large data sets as part of their role, leading to an appetite for Controls or Risk Mitigation being key topics of interview questions during the process. Other regular questions include demonstrating a time where a candidate has improved a process, enhanced efficiency or help automate a workflow, as well as highlighting if they have been a valuable collaborator or assisted with technical situation or difficult client as example.
We are seeing a staggering amount of interview processes becoming exceedingly long and not giving opportunities those who really want the role and do not tick every box. Whilst it is a hiring managers prerogative to chose what they want to justify a new hire, sometimes they are a victim of not hiring because they just took too long, asking for too many people’s opinions, or was too precise with what they needed. We always encourage a fluid, timely and transparent recruitment process. And be open on the background of where you hire from – you will pay more to attract someone from a competitor hedge fund, and you might yield more cost-effective solutions hiring from long only managers or prime brokers as example. Giving someone a chance reaps many rewards, most noticeable is that they will be skipping through the door to work as they will be learning, and not just doing the role because they are earning more.
It would not be a sincere recruitment reflection if I did not bring up Linked In. Yes, the overused and completely un-unique tool that everyone thinks can yield magical recruitment results on the cheap, and most of the time without employing or using a highly trained or skilled recruiters to manage their processes. Recruitment is a difficult skill, it is not just identifying talent, it is then managing the interview process and experienced recruiters know how to circumnavigate the challenges and hurdles that are presented. Linked In is great for the unemployed, especially where they have the time to dedicate trawling the site and must be seen to apply to as many roles as they can to earn their benefits. However, the best candidates are typically not using Linked In for a new role, because they do not have the time to trawl pages of adverts in hope they stumble across something perfect. The best talent pools are using recruiters, either actively or passively, to make sure their search is accurate, and they have someone to help them manage their process and share valuable information to help them achieve a successful outcome. Not forgetting sharing valuable insight into market conditions.
If only Team Managers knew how often their staff have been approached on Linked In by recruitment companies trying to persuade them to leave. This is because Microsoft has monetised Linked In so well that people can easily send an approach to anyone, and every firm now feels they have an external database of candidates looking for work. Which it is not. Only 5% of people on Linked In want to hear about new opportunities and displaying the “open to work” badge. What is not realised is everyone is fighting for that same small pool of talent, and most people making offers to the same one standout candidate and then the majority missing out to more competitive offers. This is unfortunately very common. Many Hedge Funds have direct Talent teams based in international locations, and do not have day-to-day knowledge of the local recruitment market, and certainly not aware of what their competitors are doing simultaneously, yet they are not afraid to send a message to anyone and everyone in hope that one might stick.
This will all naturally cause staff retention issues, constantly turning employees’ attentions believing they can achieve more elsewhere, even more so when large salaries are dangled in front of them. What is omitted from people’s realisation is this is causing many people to spend less time on Linked In, because users are getting fed up with the continuous number of unsolicited approaches from all types of salespeople or robots. And if you’re not on Linked In at precisely the right moment, then you can’t see the role being advertised, and by the time you do then 200+ people have already applied for the role and you’re likely to not be considered. Let alone any kind of response or communication back from the company you have applied to.
This all causes huge frustrations, complications and hiring delays, much to the annoyance of hiring managers who typically want to use a trusted recruitment partner, and not just rely on a company-wide stance to try and do recruitment on the cheap via Linked In. Yet most times they are unable to influence a HR team, which is counterintuitive when you consider a Talent team is there to support the Hiring Manager and their needs to deliver quality Operational support to the business.
Many firms we speak to want 2025 out of the way given all the volatility and 2026 is looking positive in terms of hiring needs. With 2025 boasting many recruitment strategies because of replacement needs we have many firms already talking to us about hiring to support expansion and increase in trading volumes. Many businesses we are speaking to have increased their front offices, determined to drive revenues further, and the subsequent knock-on effect is to have a robust Middle Office and Operations function to support this.
This is exactly where CassonX can work alongside you with your hiring needs. Be prepared that most candidates will have three months’ notice period, even the inexperienced staff, and we are also witnessing many companies willing to buyout bonuses to attract the staff they want, of course with proof of their previously paid total compensations. Face-to-face interviews are once again the norm, and it is also expected that most Hedge Fund employees are in the office 4 or 5 days a week, with hybrid working conditions starting to become a thing of the past in this sector and certainly in the $5bn+ AUM funds.
We are advising all candidates looking for work in this sector to make sure their CV details all the asset classes and strategies they have supported, to make sure that hiring managers can make an informed decision accordingly about transferable skills. During COVID, the introduction for more awareness to DE&I became very prominent, it is now expected that each shortlist of candidates that CassonX provides is considered as diverse as possible, giving equality to the hiring process and an inclusive decision based on merit.
We are delighted to let you know that CassonX has produced its annual salary and total compensation survey for the Hedge Fund sector and it separates the detail via company size and type of role. This is not a mass-produced salary survey, it is live, it is specific, and it is produced without AI. Most importantly it is free and gives a realistic snapshot of our market.
Should you wish to see a copy then please go to our contact page, click on Clients, select salary benchmarking and fill in your details accordingly – don’t forget to include your work email and contact number.
This information is available to all those who have hired or are thinking about hiring, and we will be happy to send you a copy via email or even catch up over a coffee to discuss further. If you are a curious candidate wanting to see this information, please do let us know and we can arrange a separate conversation, as this data is designed for hiring managers and clients who are looking to benchmark their own teams.
As our leader James Manders celebrates 20 years as a specialist recruiter in the Financial Services sector, he was asked to share his thoughts and guidance in a series of interviews with the wonderful team at eFinancial careers, as part of their Talent Conversation series.
It goes without saying that James has seen a lot in the last 20 years, and he is immensely proud to be a trusted partner with many candidates, clients, service providers, and vendors, and loves talking about his market knowledge and experiences throughout his tenure.
Should you wish to review these talent conversations, then please see below links:
Mastering salary negotiations in 2024: https://vimeo.com/917965752
Navigating the impact of hybrid working: https://vimeo.com/917965537
The early careers dilemma; challenges & solutions in today’s job market: https://vimeo.com/917965456
Exploring in-house vs. recruiter hiring teams: https://vimeo.com/917965291
Please do take the time to review our other blogs, market intelligence, advice, and all things recruitment in the Resources section of our website
Last year witnessed a significant surge in hiring across our specialised recruitment market. In 2023, attrition rates slowed, companies were focused on retention of important team members, acknowledging the challenges of attracting talented individuals who can handle the demands of an Operations role within Capital Markets. It was a busy start to the year for Senior level hires, Q1 and Q2 is where the higher volume of roles at Director level (and above) came to market, ‘BAU’ hires have been more active throughout the year. There has been a focus from hiring managers on finding product specialists, largely with a view of automation in mind, this has driven the need for specialist recruiters to step-in as LinkedIn/direct advertisements are often failing to return suitable profiles.
Candidates with under 3 years’ experience are still the most requested profiles. A desire to attract talent with Excel VBA or Python skills is becoming increasingly popular, making this hire incredibly difficult, with demand showing a noticeable increase in salaries and total remuneration. I believe this has resulted in making this end of the market lack value, as demand is outstripping the supply. We still have to remind many firms that few graduate schemes were run in 2020 and 2021, which has impacted the candidate market at this level. The rising cost of living has also nudged potential candidates, across all degrees of competence, toward seeking new roles with better packages.
Salaries have seen an increase across all areas, albeit the difference wasn’t as significant as that seen through 2022. The most noticeable area of change this year has been within Controls and Transaction Reporting, where there has been high demand for candidates with broad regulatory scope, strong reporting coverage and an ability to mitigate potential risk within a standard BAU role. We have placed candidates with 2-3 years’ experience on salaries in the £70,000 – £80,000 with many not entertaining a conversation regarding a potential move without seeing a minimum of £10,000 salary increase. The contract market has been busier for FTC (vs PAYE), although many companies have struggled to find candidates quickly, this is often as the salary is reflective to match a permanent member of staff, and not incorporating the added risk of the incumbent taking on a contract position.
It is worth noting that working conditions are changing. We are seeing many companies now moving from a 3&2 hybrid working model, and now implementing at least a 4&1 or more noticeably a 5-day onsite working environment again. We get many candidates on a weekly basis, who have become accustomed to the hybrid model, now approaching us for a new role as their companies are enforcing a non-hybrid model. Largely because it is realised that employees do a lot of non-work-related things during the working hours and consequently distracts from hitting targets and cut-offs as example.
More companies are also holding face-to-face interviews instead of video, and this is why some recruitment processes have slowed to accommodate suitable interview times outside of standard working hours. Many companies are now enforcing a 3-month notice period across Operations staff.
We are delighted to let you know that CassonX has produced its annual salary and total compensation survey for the Capital Markets sector and separates the detail via role type and experience levels. Should you wish to see a copy then please go to our contact page, click on client@cassonx.com, select salary benchmarking and fill in your details accordingly. We will be happy to send you a copy via email, or even catch up over a coffee or lunch to discuss further.
Working Conditions are changing. Again.
I have been reminiscing on my tenured experience of recruiting into Financial Services. In particular the buzz of the City of London for 5 days a week.
It was only a few years back where one of the most important parts of going to work was to build face time with peers and seniors, to help credibility with career advancements and enhancing camaraderie. Not forgetting the fun factor too. It’s crazy to think that this was almost eradicated when COVID descended upon us.
Times have changed, we are now in a huge transition with working conditions, taking our journey back to pre-COVID times.
We are finding that remote roles are almost extinct, that’s for sure. Most firms are still adopting a 3/2 or 4/1 routine, however, there is a surge in companies now insisting on 5 days in the office, and is becoming normal again.
We get lots of candidates coming to us because their companies are enforcing 5 days in the office, and justified with lots of research out there that proves there is less productivity with companies that adopt weekly WFH arrangements. Employees have become accustomed to the new routine of it all – less commuting time and saving money on commuter costs, and yes, being able to take delivery on that all important item you need.
What I find flabbergasting is that we still get job applications of recent graduates who still want to work fully remote, with no idea of what the City used to be like, and expect to be rewarded and have impatient desires for career advancements
My team here at CassonX have seen that many companies now want to do face to face interviews again, not exclusively video, and certainly with those who have a 4/1 or 5 day in office week policy.
Fast forward 3 years, I think everyone will be back to 5 days in office, except for the much larger firms who want to save on office space, and can have more processing type of roles that can be done at home without supervision.
And just to think, 10 years ago I was reminiscing of working in the City where there was open outcry stock markets, and not just seeing it on Trading Places or The Wolf of Wall Street.
I wonder what I will be reminiscing on in 10 years to come…
