Hedge Funds

Hedge funds hiring again after downturn

LONDON (Reuters) - Hedge funds and bank trading desks are hiring again and have already snapped up some of the most talented managers who were dislodged while firms struggled in the credit crisis, industry insiders said.

Hedge funds endured a tough 2008 in which nearly 1,500 portfolios closed, according to Hedge Fund Research, as performance slumped and clients pulled out cash.

However, as returns have improved and redemptions slowed, some funds have grown confident enough about attractive investment opportunities to take on staff -- particularly marketing executives to help lure back assets, operations staff and fund managers expert in popular strategies.

Firms such as Citadel, RBC Capital Markets, Artradis and Tribridge have all recently hired staff in hedge-fund-related roles.

“Things have definitely turned around. Hedge funds are hiring and prop (proprietary trading) desks are hiring,” said Bob Olman, founder of recruitment firm Alpha Search Advisory Partners.

“Volume (of job placements) is up threefold from the first quarter ... The number one role is marketing,” Olman said, noting activity had picked up in distressed debt and credit, equity long-short and global macro specialists.

“Surprisingly, U.S. equity statistical arbitrage and systematic trading are hiring,” he added.

Falling asset levels, on which fund firms earn fees, and lower performance fees have forced many firms to cut back on staff in recent months.

Last November GLG Partners Inc GLG.N cut headcount by 15 percent and reduced payouts to temporary and contract staff, while Man Group Plc EMG.L said in March it could cut 15 percent of permanent staff.

However, a sharp upturn in performance this year -- in the first seven months of 2009 hedge funds returned 9.9 percent, according to Credit Suisse/Tremont -- helped by rising equity markets, has encouraged some firms to begin hiring again.

“Anecdotally it really feels like things have turned. There seem to a lot more people looking for staff,” said Odi Lahav, vice president at Moody’s alternative investment group.

“For many funds, performance is up and more managers are looking towards growth again. So, after having cut a lot of staff around the end of last year, they’re now looking to restaff in areas they think are worthwhile.”

The jobs market is still slacker than before the credit crisis and hedge fund executive pay is also lower, but many of the most talented managers have found new jobs, Alpha Search’s Olman said.

“A lot of highly talented people, who were dislocated by the downturn in the banks, have been picked up,” Olman said.

“It’s a little bit harder to get quality people than the first quarter. There’s no fall in the number of unsolicited resumes ... but the quality has dropped.”

Editing by David Holmes