Deluge of New Managers Drives Hiring Frenzy in European CLO Market

The fight over talent in the European CLO market is set to intensify as new market entrants on a hiring spree drive compensation upwards, according to headhunters who specialize in hiring in the industry.

Firms like Elmwood Asset Management, Silver Point Capital and Muzinich are working to expand their US CLO programmes into Europe. Others including LGT Capital Partners and Royal London Asset Management are setting up new platforms. All of them need staff.

“The portfolio manager search is clearly going to be the ongoing focus,” said Owen Leighton, principal headhunter at Waterman Stern. “We’re talking about at least half a dozen managers that will have to look for a PM.”

Senior moves, such as Elmwood hiring Aly Hirji as head of European credit from BlackRock, or Max Elliott-Taylor joining Silver Point from DWS as CLO portfolio manager, receive the most public attention. But the bulk of the hiring activity is happening at mid-level.

“The biggest shortage of candidates is at associate and junior VP level,” said Edward James, founding director of the recruitment firm RCQ Associates. “The three-to-eight year bracket is most in demand.”

Around 25% of U.K.-based CLO market participants with less than 10 years of experience have changed companies within the past year, according to RCQ analysis of LinkedIn data.

“There has been so much hiring in the past 12 to 18 months that there is now a small pool of people who are open to a move,” James told Octus.

Market activity has exceeded expectations over the past two years, leaving teams stretched. According to James, many firms tried to hold off hiring last year because they believed the market would quiet down after the U.S. election. Instead, deal volumes remained high.

Year to date, CLO managers have priced more than €33 billion of new issues and €24.5 billion of resets, according to Bank of America Global Research, which makes 2025 the busiest first half of a year on record.

“Some people are feeling the pressure of consistent high volumes,” James said.

In most cases, CLO managers and funds want to hire people with experience at other buy-side firms, according to Leighton.

In June, for example, AlbaCore Capital hired Diarmuid Curran as portfolio manager from Napier Park.

However, those employees tend to be harder to poach since asset managers often offer long-term incentives to staff.

For many sell-side bankers, a move to a CLO manager or investor is often considered an attractive career change, although banks also offer incentives to retain staff from around VP level and upwards, sources said. Buy-side jobs have a reputation for better work-life balance and higher long-term compensation.

In a prominent sell-side-to-buy-side move, Laura Coady is set to join Blackstone from Jefferies as global head of CLOs.

Especially at more junior levels, ratings agency employees are a well-trained and cost-effective option for managers and funds, James said. As a result, ratings agencies have struggled with high turnover, he added.

Poaching efforts of new market entrants combined with the previous employers’ need to replace leavers has led to a major reshuffling at the VP level, especially among CLO structurers at arranging banks.

Earlier this year, Standard Chartered hired Constantin Hulst from Citi, suggesting that the bank may want to break into the arranging business in Europe.

Citi hired Nijeetha Santhalingam from Natixis. Natixis, who also lost Alexander Ong to Morgan Stanley and Stefan Stefanov to the buy side, hired Siddhant Bhardwaj from L&G and Pierre Courtecuisse from BNP Paribas.

Rob Low also left BNP Paribas to join Goldman Sachs while Deutsche Bank hired Diego Garcia Gonzáles from Jefferies.

The imbalance between supply and demand for talent is driving compensation upwards, especially for credit analysts, recruiters said.

“Hedge funds have clearly come in to mix up the market with high demand for the best talent,” said Leighton. “But the comp difference between existing managers is now dramatic and I think there is an underlying risk for these managers to fall short of talent.”

According to a report published by RCQ Associates earlier this year, structured finance analysts in the U.K. received total compensation of up to around £125,000 per year.