Navigating the talent shortage in structured credit: Challenges and opportunities in CLO recruitment.

Over the past 18–24 months, demand for skilled professionals in the CLO market has surged. Large asset managers are expanding their structured credit teams, while smaller firms are building dedicated CLO desks from scratch. This growth has created a highly competitive hiring landscape, with firms seeking candidates who possess not only CLO-specific experience but also the ability to adapt to the evolving demands of structured credit.

According to Vijay Sanghvi, Head of Operations Recruitment at One Ten Associates, “The CLO space has always been niche, but the acceleration in hiring over the past couple of years has been unprecedented. We’ve assisted on team build outs, as well as individual hires; to include PMs, structure, and middle office staff. We’re seeing firms competing for a limited talent pool, and that’s driving salaries up and changing hiring strategies.”

The challenges of CLO recruitment

Recruiting in structured credit has never been straightforward, but the current talent shortage has made it even more challenging. One of the biggest hurdles is the limited pipeline of professionals with direct buyside CLO experience. Hiring managers are open to candidates from admin backgrounds, but there are nuances to consider when looking at systems and analytics experience.

Firms are having to decide between holding out for the ideal candidate or investing in training non-traditional hires. As Vijay explains:

"Clients naturally prefer candidates with hands-on buyside CLO exposure, but they are also becoming more open to upskilling professionals from adjacent roles. We’ve successfully placed candidates who started in trustees or administrators but have developed the technical expertise needed for roles on the buy-side."

Another challenge is salary expectations. With demand outstripping supply, compensation for buy-side CLO roles has increased by 15-20 per cent, making it more difficult for smaller firms to attract talent.

How firms are adapting

To navigate these challenges, buy-side firms are adjusting their recruitment strategies in several ways:

• Training internal talent: Some firms are developing junior employees from administrative backgrounds and providing CLO-specific training, ensuring a steady pipeline of skilled professionals.
• Broadening the talent pool: Recruiters are encouraging clients to consider ‘wild card’ candidates - those who may not have direct CLO experience but possess the necessary analytical and technical skills.
• Offering competitive packages: Higher base salaries, attractive bonuses and hybrid working arrangements are being used to entice top talent.

A recent case study by One Ten illustrates this approach. A growing CLO fund manager was looking for a pivotal hire for their middle office team. They had discussed the ideal profile being from a buyside background, and this seemed to be a non-negotiable part of the mandate. However, after meeting a few candidates with that exact experience, they didn’t see a fit. With a restricted candidate pool in mind, One Ten advised them on broadening the search to include trustee and admin experience. With an additional testing stage included in the interview process. We quickly identified one candidate in particular who sailed through the process, and has been an important part of the CLO business, helping the core build out of the infrastructure and running BAU.

Market outlook: What’s next for CLO hiring?

Looking ahead, the structured credit hiring landscape is likely to continue evolving. While demand for CLO professionals remains high, firms may need to adjust their hiring criteria further, placing greater emphasis on training and transferable skills.

Additionally, we see technology becoming more embedded within structured credit, and candidates with technical expertise - such as Python, SQL and Power BI - will be in high demand. “Candidates who can combine structured credit knowledge with data analytics capabilities will be at a major advantage.” says Vijay.

For firms looking to stay ahead in the competitive CLO market, a strategic and adaptable approach to recruitment will be essential. Whether it’s training internal talent, broadening the talent pool, or enhancing compensation packages, success in structured credit hiring will depend on the ability to navigate the talent shortage with a forward-thinking mindset.

Need help with CLO recruitment? One Ten specialises in finding top talent for structured credit and CLO roles. Get in touch to discuss how we can support your hiring needs.