Asset Managers, Asset Owners, Foundations, and Charities

Market update Q4:

Reflecting on my meetings from Q4, I have detailed the inside information that will be of most use to my contacts:

Hiring increase – a trend or an end of year anomaly?

Normally hiring activity drops off a cliff first or second week in December, but in 2024, we saw the opposite.

There was next to no hiring from the beginning of the summer until the start of December. Then the conversations around future strategy, growth, and some searches kicked off. From a macro level, we think that now that the 70 (or so) global elections that happened in 2024 are over, and that the BIG ONE is out of the way, there is less uncertainty. Even the worst news (for sustainability folks) might be better than the uncertainty that was there before.

 The world still turns, and climate risk is still a material issue.

While I don’t have a crystal ball, the hiring spike has continued into the New Year, albeit mostly junior and mid-level hires, and nothing that suggests lift off. It does seem likely that this increase in sustainability hiring in the UK and US (yes, the US!) is the beginning of some sort of sustained growth, although it may not feel like it for a while.

The hiring spike(!?):

What will hiring look like in the near future? I don’t think we are ready for strategy heads, and leadership hires. The hiring will be at the intersection of what asset owners are asking of their managers, and what managers feel their other investors (non-believers) will let them get away with.

Likely this will be taking us back to the roots of ‘ESG’ - to governance, and stewardship with a focus on financial materiality (particularly in the US).

While in the UK and Europe, stewardship teams are well stocked, and we have seen redundancies at some of the major players as recently as the first week in January, the US teams (outside of the big index houses) are still understaffed.

There has been and will be a raft of hiring junior and mid-level talent with a ‘few’ proxy seasons under their belt. The focus will be on G, a bit of E, and very little on S.

How can you secure the best talent in 2025?

2024 was the year of the online job advert. Cost-conscious firms met with floods of applications overlooked the passive talent who aren’t online searching for a job (usually the best people, who are too busy, or too well looked after).

Many of the people who have been hired have taken a role that might be too junior, or joined a company that doesn’t satisfy their own, personal mission. These people will move when a more suitable job comes, and we will have the next great wave of hiring, and firms will not being able to find the talent.

Great for us, but not great for productivity. We would rather everyone got it right the first time by running a search and assessing talent from a broad range of backgrounds on their motivations (as well as approaching those who put their hand up).

Compensation:

Compensation has plateaued and pay increases are set to be minimal. We expect 0-10% to be the norm. But we have heard that there is a worry that some teams are exposed to head hunting when hiring activity picks up again. Where possible, leadership have been pushing for bumper pay rises (above market rates) to help keep their best talent.

This is maybe another sign that the hiring market is about to pick up.

Bonuses are not being paid out at all at the more cost-conscious firms where there have been redundancies. Other firms are starting to see inflows, and more positive performance, and they are paying out in the 10-30% region.

Foundations, Charities and Non-Profits:

As the institutional investors and asset managers have cooled their interest in progressive ESG topics, there has been a shift in talent back from the private sector and investment world, to nonprofits, and other mission driven sectors.

Many people who made the move the other way, now want to move back. The feeling is that personal impact can be best found working in a sector, or organisation where there is no restriction on strategic growth when it comes to sustainable outcomes.

The backers of these organisations are still affected by the same macro-economic factors that trouble the investment firms, but with the heavy regulations, and political pushback, they are still moving forward.

The hiring has centred around fundraising, in what has been a more competitive environment than ever; around network management, programme management and policy. The sense is that there are strategic growth objectives, but the funds need to be there to support the growth.

Numerous firms are hiring at once, and engaging with recruiters is the best way to make sure you can get the right balance of personality, calibre and experience.

We have been asked to help with a lot of the more ‘commercial’ role, because finding exceptional people in that space can often be tricky.

There are some high-profile moves expected in H1 2025, and we have been engaged on some senior mandates. So, watch this space.