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Bailey McCann, Opalesque New York: The asset management industry is bracing for job and pay cuts according to the latest report from Johnson Associates. Lower fee products, a greater risk for defaults and a tumultuous market environment will make it difficult for asset managers to maintain current headcount and pay rates even if performance ends up bouncing back.
For alternative investment managers, the picture is especially murky. Hedge funds have seen months of outflows, but some of that has been offset by a rebound in the market. In private equity, defaults could have a significant impact on middle-market funds which have been some of the strongest recent performers. Fund managers could make it to the end of the year with decent enough performance and still have to make cuts to bonuses and headcount. The report suggests layoffs could hit 5-15% of staffers - a trend that could continue through 2021.
Elsewhere in asset management, Johnson Associates expects a decline of 10 to 15% in traditional asset management positions this year compared to year-end 2019. The report forecasts that layoffs will begin this year and continue through 2021. Flows have been relatively stable for traditional asset managers but, the shift toward low fee passive products has made it hard to maintain staffing levels.
In investment and commercial banking, a significant upswing in trading revenue may not be enough to fortify incentive pools. Banks have started to brace for potential lo...................... To view our full article Click here
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