Hedge funds: Hiring strong, but US funds a turn-off

London hedge fund recruitment remains buoyant, according to recruiters involved in the sector. But staff are said to be increasingly wary of working for satellite offices of US funds.

"Hedge fund recruitment is currently very, very buoyant," says the managing director of a search firm specialising in the sector. "We have seen no let up at all in hiring," she adds: "There's been a swing back towards investment and distribution roles, and particular activity in global macro, event driven and special situations funds."

Strong hiring at hedge funds sector matches news of improving investment returns in the sector. The Credit Suisse/Tremont Hedge Fund Index rose by 3.23 per cent in January, on the back of strong gains at global macro and event driven funds.

There's also evidence that the European funds are outperforming their counterparts in the US. According to an article in the current issue of Alpha Magazine, European based hedge fund managers delivered a net return of 10% across all strategies in the nine months to September 30 2005. US funds returned just 6.4% over the same period.

Unsurprisingly, the article says US hedge fund managers are looking to diversify their holdings into Europe. Optima, a New York-based hedge fund manager and Ivy Asset Management, a US fund of funds business, are among those to have opened London offices in the last six months.

However, London recruitment consultants say the city's hedge fund managers are wary of becoming embroiled in a US fund. "It can be very hard to attract the right people," says one. "Several US firms have shut down their London offices in the past and there's a feeling that you'll be working for a satellite operation where most of the decisions are made elsewhere."