Alternative fund managers are facing a compliance recruitment crisis

Firms are finding it hard to hire the professionals they need amid rising complexity

Alternative fund managers are facing a compliance recruitment crisis
Steve Randall

The talent shortage could be putting alternative fund managers at risk as they struggle to recruit compliance professionals for increasingly complex challenges.

An international survey of investment managers with private equity, venture capital and real estate funds by Ocorian has found that 77% say it is hard to recruit the right people for legal and compliance departments and 69% believe the situation is only going to worsen.

There are several factors impacting hiring, with the top four revealed as:

  • complexity of regulatory matters
  • salary demands of compliance and legal professionals
  • competition for talent
  • increasingly global and international nature of regulation

These challenges have left almost two thirds of respondents feeling that their compliance teams are under-resourced including 17% who say they are very under-resourced. Just 7% say they are over-resourced.

"We are increasingly seeing growing demand from existing and new clients for support on regulatory and compliance issues as the growing complexity of their businesses increases their costs,” said Aron Brown, head of Regulatory & Compliance at Ocorian. “That is driving more outsourcing to third parties like us as firms recognise the need to ensure they are compliant.”

The survey also highlighted the risk to firms and their executives with almost half stating that executive directors are held very accountable for their actions and almost as many saying they there is relative accountability for board members.

Recent research from the firm also found that eight in ten investment professionals and business executives are expecting a rise in the number and overall value of fines in their sector for non-compliance with 16% believing this will be dramatic.