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July 5, 2006
Hedge fund career allure is still strong
Fund management companies face a tough fight to hold onto talented employees against the lure of hedge funds, a research executive said on Tuesday.
With many managers defecting to hedge fund start-ups and other small companies to enjoy the freedoms of working for themselves, the labour market for large firms is likely to remain difficult, Amin Rajan, chief executive of research firm Create, told a conference.
"There is a war for talent...hedge funds are vacuuming skills from the long-only houses," he said, referring to an exodus of professionals from traditional asset managers.
His comments come at a time when the $1.5 trillion (810 billion pound) hedge fund industry has been continuing to draw in recruits, although the sector has experienced headwinds in investment performance in recent weeks.
In the past few years, there has been a steady move of financial professionals from investment banks and fund management companies to hedge funds, attracted by the possibilities of making a fortune, avoiding the bureaucracy of a large firm and the aggravations of working in a large financial centre such as London.
An analyst with four years' experience can earn between 50,000 and 70,000 pounds in a larger fund management business but in a hedge fund, an exceptional individual could earn up to 120,000 pounds, according to British recruiter Michael Page City earlier this year.
For much of this year, fund management firms have been on a hiring spree, paying higher bonuses to attract and retain staff, galvanised by the rise in stocks since March 2003.
Among the hedge funds moves cited in a recent report by financial news service Citywire is that of Simon Roberts, formerly Tony Willis' top-rated co-manager on the Lazard UK Alpha fund. He is currently the director of BlueCrest Equity Master Fund.
Some companies have the ability to set up in-house hedge fund operations while others find it a distraction, Robert Sargent, head of asset management, Europe and Asia, at Lehman Brothers, said at the same conference.
In certain cases, it may be difficult to value a traditional fund management business with a hedge fund operation in-house unless the unit is clearly separated from the rest of the company, Robert Jenkins, non-executive chairman of F&C Asset Management, said.
"If you do have that (hedge fund unit) I would strongly recommend that you segregate the business within the business."
-Reuters-
Posted by su at July 5, 2006 4:43 PM