As money flows out of hedge funds lately, résumés pour in.
Not that it’s all that attractive a job sector. Most hedge funds are down this year, which means they’re not making their all-important performance fees, which in turn means that employees won’t be getting anywhere near the kind of remuneration they had hoped for.
“What will that pool percentage be — 2 percent?” asks Robert Olman, founder and president of Alpha Search Advisory Partners, a Roslyn, New York–based search firm for hedge funds, funds of funds and other investment managers.
Getting a bonus, of course, assumes you aren’t laid off, which raises another question: Where do you go if that happens? The U.S. Department of Labor reported that in September alone 17,000 financial-services jobs were lost (172,000 have vanished since December 2006).
“They’d find it impossible to get hired,” says Greg Friedman, CIO at Pittsburgh-based Greycourt & Co., a wealth management firm that evaluates alternative-investment managers.
Some high-end hiring continues, however. In early October, for instance, $20 billion Citadel Investment Group snapped up three senior investment bankers from bankrupt Lehman Brothers as the Chicago-based firm added to its global fixed-income business. Citadel, whose two flagship hedge funds were down nearly 30 percent this year through early October, also recently hired bankers from a number of other top firms, including JPMorgan Chase & Co. and Credit Suisse.
One result of all the market and employment turmoil is that investment professionals have broadened their geographic horizons, with those in the U.S. more inclined to consider possibilities in Asia, Dubai, Europe and other foreign locales. “Workers who’ve been on Wall Street for a decade or more and have reached higher levels now are considering India, China or Africa to grow their proven investment strategy in another marketplace,” Alpha’s Olman says.
This is a two-way street, as foreign companies see the current U.S. job market as an opportunity to expand or gain a foothold in New York. “Two years ago, an overseas firm would have had to guarantee an executive, let’s say, $1.5 million, whereas that same person today says, ‘I’ll come on board, but you need to protect my downside and risk,’” says Olman, explaining that a cut in pay is sometimes exchanged for the promise of job security.
Such arrangements come with other trade-offs. One of the obvious ones is that the executive doesn’t have to move. Part of the downside is trading the business card of a first-tier bank for one from that of a lesser-known and probably not as well-regarded firm.
Confidence seems as inherent as ever among salespeople, who remain in demand.
“The retail end is still making money despite all the tumult,” says Howard Diamond, chief operations officer of Chester, New Jersey–based Diamond Consultants. Sales professionals “are still making enormous amounts of money,” Olman adds.
He also says some Wall Street employees remain in limbo following this year’s wave of failures and mergers, which included the September bankruptcy of Lehman Brothers and the February acquisition of Bear Stearns Cos. by JPMorgan Chase: “We’ve heard from current Lehman workers that they got a note from Barclays saying that the bank needs to assess and that there’s no commitment yet to who’s staying or going.”
But search firms are still making placements. Jobs are available, just not as many as before.
