Making a decision to approach a recruiter to find a hedge fund job might be a great move, but first, you should understand how the executive search game works and the different services hedge fund recruiters provide, as well as their limits.
Some smaller firms trying to fill hedge fund jobs shy away from hiring recruiting firms because they don’t want to spend the money. By doing this, these fund managers severely limit their talent pool and only bring in people from their personal network.
The more sophisticated (and often larger) hedge funds, on the other hand, understand that it takes a lot of hard work to find the right employees. They want to save as much time as possible and reach out to recruiters who can look at a wider talent pool. Typically the more senior the position, the more frequently hedge funds use retained search firms.
In addition, hedge funds are often quite secretive and recruiters can approach the market sensitively and not reveal the name of the client until they know someone is interested. Finally, a comprehensive industry search, encompassing both buy-side and sell-side talent, can be very time consuming – time that most managers do not have.
First of all there’s a huge distinction between contingency recruiting firms and retained ones.
While the common thought is that contingency recruiters don’t tend to do search for senior level hedge fund employees, that certainly is not always the case. The true difference between the two is in the manner in which they are paid.
Retained recruiters are generally paid a portion of their fee in advance by the hedge fund and see themselves as consultants, or an extension of the firm. They usually have close relationships with the firm partners and work with them on an ongoing basis. Contingency recruiters, on the other hand, are usually paid once a person is placed. So for example, if a candidate is targeting a smaller hedge fund, or does not have a lot of experience, a contingency firm might be a better fit because the hedge fund would only pay the recruiter if the candidate is hired.
In addition, retained firms are often difficult to access because they tend to operate with their own database of candidates and because they receive many unsolicited phone calls and emails, they tend not to respond to them.
In our interviews for this article, several retained recruiters said that the best way to get noticed is for a candidate to ask around and see who his peers recommend, and then get introduced by someone who knows the recruiter – as they rarely reply to unsolicited approaches.
James Chanko, president of New York-based Chanko-Ward, a retainer-based firm, said that candidates should “get their names out there,” by sending a resume and a very short cover letter, then “forget about it” as you don’t want to harass the recruiter. “If they want you they will contact you,” Chanko says. “My clients pay us a lot of money and they want searches done right now, they don’t want procrastination. So if we’re interested, we’ll let you know, don’t worry.”
So there is no need to email or call every week, it’s just better to wait a few months because “candidates become real pains when they do.” And then, if the process stalls, the best way to reignite it is to send an updated or revamped resume, inviting the recruiter to take a fresh look at it. “And send a low-key, non-threatening email.”
Chanko, who is a big believer in the power of networking, adds that candidates cannot rely solely on recruiters – they also have to spend time targeting firms on their own. “Put your name in the retainer community and do your own networking.” Another tip, he says, is to never ask a recruiter for a job, but ask for “career advice.” And target the timing of the phone calls. He recommends calling early in the mornings, when people are not in meetings.
Richard Lipstein, a managing director at New York-based Boyden Global Executives, has a pool of 28,000 people in his a database, and echoes Chanko’s advice: the best way to work with a recruiter is to be recommended by someone who has already worked with him. He also says that if a candidate’s track record is not that successful, he needs some viable explanation or it will be hard to get back in the game if he left a firm.
If the candidate finally lands the much coveted face to face time with the recruiter, he should make the most of it. Have a business agenda and one goal in mind and consider this question, “What do I want them to remember about me when I leave?”
Hedge funds tend to hire either people just like themselves or people better than themselves to keep improving the firm. Lipstein says that hedge fund partners “live and die for their next investment” but in the end, they are people who want to hire someone they are comfortable with. In that regard, he meets with many decision makers in the firm to understand them, their personalities and their culture.
Candidates should be realistic and set their expectations accordingly.
Chanko says he preps candidates for interviews with firms. “I always tell them, you don’t go to a dermatologist for brain surgery.” Candidates need to do their homework, know the firm’s priorities, work culture, mission and its current issues. It pays to be prepared.
Lipstein says that candidates need to develop a relationship with the recruiter over time and be professional about it. “People should be as courteous with a recruiter as they are with a potential employer,” Lipstein says. “Candidates you don’t know tend to think that you’re a dime a dozen. But there are rules and protocols and you need to follow the same professional niceties.”
He highlights the importance of social graces: avoid emails with typos (which he says happens often) and leave articulate voicemails. Simple but effective. “It gives you a sense of how people are, if they lack social intelligence they won’t be successful in a company. Working at a hedge fund entails a lot of social interaction… it’s a key indication of future success.”
Yael Bizouati has a Masters in journalism from NYU. She is a financial writer and has been senior editor at Financial News-Dow Jones, Investment Dealers’ Digest and HedgeFund.net.