If General Motors completes its initial public offering on or
before, November 19, 2010, it will be added to the Wilshire 5000 Total
Market Index, effective after U.S. markets close on that
date.
A Wilshire Associates news release said the inclusion will be in
conjunction with the regular monthly additions and deletions of the
Wilshire 5000.
“Since its 1974 inception, the Wilshire 5000 Total Market Index
has been designed to be a pure and complete representation of the total
U.S. equity market,” said David Hall, senior managing director,
Wilshire Associates and head of Wilshire Equity Analytics. “A rules-based index, the Wilshire 5000 does not need to make
special accommodations for early entry of large IPOs. Stock additions
have always been made monthly for U.S. companies with readily available
price data.”
Hiring and Compensation in Asset Manager Space Improving
After two years of contraction, hiring in the asset and wealth
management industry rebounded in 2010, and compensation is set to show
modest gains, according to a new report by Russell Reynolds Associates.
For the asset and wealth management industry as a whole, certain functions and specialties are starting to see increasing compensation pressure to attract or retain key personnel. While
overall U.S. compensation is set to increase 10% to 15% this year,
compensation in Canada, Europe and Asia is expected to jump 15% to 20%,
although bonus pools will be finalized later this year than in previous
years.
The report, Navigating the New Terrain in the Asset and Wealth Management Industry,
indicates asset managers returned to the basics to get business back on
track and focused on top line growth, now that much of the dramatic
cost cutting is behind them. Firms with platforms distinguished by their
integrity, transparency and simplicity attracted not only clients, but
talent.
According to a press release, wealth management remains
highly competitive, with dominant national platforms fighting to hold
market share in the face of consolidation and the increased threat from
smaller boutiques and regional players, who are gaining ground in their
ability to attract wealthy clients and top advisory talent.
Demand for CEOs with investment backgrounds continued into
2010, yet finding qualified individuals with the desired mix of
leadership and technical skills proved increasingly difficult. As a
result, “best athlete” appointments were on the rise, with solutions
coming from other branches of the financial services industry such as
investment banking, capital markets and the securities business, Russell
Reynolds said.
Chief investment officers were in great demand this year
as endowments, foundations, pension funds, family offices, sovereign
wealth funds and asset and wealth managers were searching to fill that role. Debra Brown, a managing director at Russell Reynolds, points out
the competitive headwinds from numerous simultaneous CIO searches led
boards and investment committees to consider creative, non-traditional
solutions in addition to tried and true methods.
There was also an increased demand for risk managers who have had
line or profit/loss responsibility (to run business-unit level risk
functions) as well as for those who have the demonstrated ability to
work effectively with investors, bankers, and traders. However, the rise in
compensation this role has enjoyed is expected to level off this year.
Financial officer headcount remained steady in 2010, as
companies continued to upgrade financial officer talent and weed out
underperformers. CFOs, controllers, tax and audit executives are now
expected to be strategic and proactive in working with senior management
to create efficiencies across the organization. Compensation is
expected to be flat to up 10% over last year.
(Cont...)
Investors Dipping Back into Hedge Funds, Real Estate
Russell Reynolds Associates’ fourteenth annual report, Navigating the New Terrain in the Asset and Wealth Management Industry,
indicates assets started flowing back into hedge funds this year,
though new fund formation has become increasingly difficult with fewer
and smaller launches on the docket. Larger, more mature hedge fund firms
face the challenge of passing on the equity value to the next
generation such that succession planning and ownership structure have
come under increased review, according to a press release.
Investors
began allocating capital to real estate again, although slowly and
episodically with a bias towards core strategies, which drove the hiring
of senior acquisition professionals. Real estate investment firms
sought to build portfolio value by hiring strong operating leadership
for their assets and building succession plans for the senior executives
and functional executives of their operating companies. More than ever,
compensation will be driven by firm economics rather than by peer
group: Those who can pay, will; those who can’t, won’t.
In
the fundamental equity space, global was up, domestic was down.
Emerging markets, global, EAFE and international equity were all
sought-after strategies and will remain so into 2011, Russell Reynolds
says. As a result, there was heavy demand by traditional long-only
players as well as hedge funds for global, international (non-U.S.) and
emerging markets equity portfolio managers. Their domestic counterparts,
however, struggled to find new opportunities. Compensation will reflect
this, with global specialists seeing increases, while that of long-only
domestic equity analysts and portfolio managers will likely be flat to
slightly down except for those who turned in exceptional performance.
In
fixed income, credit continued to a hot spot, with the demand for high
yield talent and teams picking up again this year. Hedge funds saw
positive flows in event-driven, global macro and distressed credit,
adding to the upward pressure on this group. Some of this demand was
satisfied by teams coming off of sell side prop desks.
At
both traditional and alternative platforms, the most sophisticated
institutional distribution executives who have longstanding client
relationships and deep product expertise, knowledge of capital markets
and familiarity with complex financial instruments were in high demand,
as firms sought to woo investors searching for alpha. Compensation for
those fitting this profile will be up significantly more than the 10% to
15% expected to be the industry norm.
The retail
distribution talent market was stagnant. What hiring there was supported
pre- and post-retirement advice and guidance models, intermediary
channel initiatives in the RIA/independent area, and new media marketing
initiatives. Compensation expectations are flat against last year.
The
technology and operations function gained significant visibility with
executive committees and boards, due to the ability of chief information
officers to drive consolidation and automation of systems (and thus
lower costs) and align people, processes and technology to improve
overall governance and service delivery. The demand for talent is
putting upward pressure on compensation, with increases of up to 15% to
20% expected.