Chitra Baskar, President, Fund Solutions, Intertrust Group

Talent attraction and retention biggest challenge, say private capital funds

Automation and cyber security roles cited as the biggest concern

According to a new study commissioned by Intertrust Group1, three-quarters (75%) of private capital funds are struggling to recruit and retain new talent with skills shortages at their most acute in areas such as automation and cyber security. Other major problem areas were said to include the widening skills gap due to changing demands (44%) and Diversity, Equity, Inclusion and Belonging (DEIB) related challenges (41%).

There are fears among private capital fund leaders that the talent gap between vacancies and suitable candidates will only increase – 60% of private capital fund managers expect this to widen over the next five years.

The study, Introducing the Halo Framework, based on interviews with 150 senior decision-makers in private capital firms, hedge funds and private wealth managers with between US$12.5b and US$29.5b in assets under management, reveals that many fund managers are no longer insisting on specialist experience and are instead looking for people with a more generalised background who they can upskill or reskill across different function areas and rotate them as necessary.

As a result, more than 40% of respondents believe their existing training programmes will be insufficient and will therefore become a key challenge over the next five years unless they are upgraded.

Intertrust Group’s study highlights the talent gap is particularly acute in automation and cyber security, with over half (56% and 51% respectively) claiming they will need to develop workaround solutions to mitigate the skills shortfall.

The war for tech talent was cited as the biggest obstacle facing private capital firms looking to improve their data analytics and onboard next-generation technology, with almost two-thirds (64%) admitting that they struggled to recruit and retain suitably qualified staff.

Chitra Baskar, President, Fund Solutions, Intertrust Group, commented: “Most private capital firms are struggling to recruit into highly competitive technology-related roles and are increasingly seeking support from their strategic outsourcing partners to combat this. Sophisticated service providers invest a substantial amount in ongoing training and competency building within their teams and are well placed to plug in-house talent shortages.

“Our Halo Framework highlights the importance of ‘empowering your people’ as one of its core areas of focus – encouraging firms to recruit from all backgrounds, develop skills and knowledge with a tailored talent management strategy, rotate jobs so staff experience different value streams, and build a knowledge exchange system.”

A trend noted in the research is private capital firms finding it difficult to retain top talent. Firms are on a journey of business and technology transformation and to succeed, they will need people who understand next-generation technology systems, different alternative asset classes, regulations, risk management, data analytics, and mid-/back-office operational aspects. Post-COVID, developing an effective return-to-work policy and a robust hybrid working model is essential, with around 43% of the surveyed financial services firms who believe that more than a quarter of their workforce will work remotely in the future.

1 Intertrust Group’s study: Introducing the Halo Framework was conducted by Everest Group. The findings are based on interviews conducted between August 2022 and September 2022 with industry experts and a survey conducted among 150+ leaders and business heads of private capital firms, hedge funds, and private wealth managers based in EMEA, Asia Pacific and the Americas.

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