September 11, 2015 – David Barrett is managing partner of David Barrett Partners, a boutique specialist search firm which recruits senior and C-level professionals for the investment and wealth management sector. Mr. Barrett co-founded his firm in 2005. He spent 17 years of his career at two of the industry’s largest global recruiting firms: Russell Reynolds Associates and Heidrick & Struggles. Recently, Mr. Barrett was featured in Chief Investment Officer’s How to Lose Jobs & Alienate Everyone and The Talent Allocators. In the following interview, he discusses the nuances of recruiting in this demanding sector.
David, why did you focus on the investment and wealth management sector as a niche recruiting practice?
Along with starting my career in the investment management business and having a personal interest in the industry (I just realized early on I wasn’t a very good stock picker!), the investment industry is very diversified, with literally thousands of local, regional, and global participants, including traditional and alternative money managers, private banks and RIA’s, endowments and foundations, family offices, sovereign wealth funds and plan sponsors. For a professional services search firm in this space, it represents a specialty practice area where there is always demand and need for senior level retained search, regardless of market conditions. As opposed to, for example, investment banking where the recruiting market is very cyclical and consolidation has led to a limited number of banking participants and, as a result, an overly competitive and commoditized recruiting industry. So, in terms of an industry well-suited for our type of search work, we are fortunate to be in a good space. In terms of the global component, first of all, there are hundreds of global investment firms and secondly, in terms of our business model, these are often the firms with the greatest volume need for high-end searches. As a boutique, our goal is to do as much work as possible for as few firms as possible, thereby maintaining our competitive edge in terms of off-limits and access to talent. Being the only global boutique firm dedicated solely to the investment space hopefully differentiates us in that context.
What did you take away from working for two large global search firms?
I spent 17 great years at Russell Reynolds and Heidrick, including from 1995-2003 when I ran the global asset and wealth management practice at Heidrick. I got tremendous training, was able to work with and learn from some outstanding recruiters, and was able to work in Los Angeles, Singapore and New York. The majority of the 12 recruiters dedicated to this sector at my firm today have been trained in large, multi-industry search firms and I believe we bring the best of that large firm training to all of our current searches. As we tell prospective clients, a successful search is not dependent on whether you use a large or boutique recruiting firm, but the more important facet is the focused, hands-on involvement of senior level recruiters who are credible in the space, actually executing the work themselves, are only executing three to five searches simultaneously, and are not subject to large firm off-limits constraints. You can see where I am going with this but, in that context, we feel our boutique structure offers clients the highest probability for success on any given search. In our structure, seasoned partners, in teams of two, personally execute all aspects of the process. They do this without junior recruiter execution leverage or the financial need, due to low payouts as a result of large firm overheads, to carry a large search load. It is that alignment of interests between the recruiter and the client that motivated us to commit to the boutique model.
David, in addition to New York and Boston, your firm now serves clients in London and I’m told Hong Kong is coming online soon. How’s ‘going global’ coming along as a boutique sector player?
In addition to my comments above about the importance of us being global in order to best serve some of our largest clients, it is important to mention two things: First, the majority of our clients, occasionally even local or regional organizations, want a search firm that can access talent, and is in the flow, at local, regional and global levels. Being ‘on the ground’ in the U.S., UK/Europe and Asia is an important differentiation in terms of being able to best serve our clients, especially on senior global roles where the search firm needs access and credibility around the world; Second, our global clients are increasingly consolidating their search firm relationships and looking for search partners who know them well and who can deliver a consistent search product around the world. The ‘global reach’ point was the card we played when we were with large multi-industry search firms. Today, my firm has that card, along with the advantages mentioned earlier, that we feel differentiates our boutique firm and allows us to deliver the highest quality product possible.
How has the landscape changed for recruiting top talent in the investment and wealth management sectors?
Recruiting top talent in our space has always been challenging and, even with the ongoing advances in technology and proliferation of third-party candidate databases, it will not get easier. This is a very high paying industry and, if someone is successful, there will often be little incentive or reason to consider a move. Quality platforms will always be able to attract talent but it will be increasingly difficult for undifferentiated platforms to attract and retain world class talent. In either case, due to technology, the candidate identification piece has been commoditized. Investment managers will need experienced recruiters whose real value-add is their ability to access and calibrate the appropriate pools of talent. In an increasingly competitive marketplace, the challenge for recruiters will be to demonstrate they have the relationships, market credibility, and industry knowledge to not just serve up candidates, but to deliver the right candidates. With many, many years of combined investment management recruiting experience among our 12 recruiters, we have at least been trying for a long time!
You just celebrated the firm’s 10th anniversary. Tell me, what will be different in your space when you celebrate your 20th?
We work in a high-end, high-touch people business. The need for personal, focused, client and candidate centric, senior level recruiting will only grow in importance. The volume of mid-level search, with the growth of internal search and third party technology tools, may level out but what we do will always be important. A specialty focus, global reach and a business model that is best aligned with the interests of our clients, will only be more important in the years ahead as the world gets smaller and the demand for world class talent grows. Having said that, if I could really predict the future, as I mentioned upfront, I would still be picking stocks!
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media