Ratings Agencies in Hedge-Funds Push

Ratings agencies have a new target in their sights to evaluate for credit worthiness: hedge funds. Will hiring to grow the business follow?

A spokesperson for Moody's says the seven-strong hedge fund team, led by Gary Witt in New York, should grow. "We will expand as client demand warrants it," he says.

One recruitment consultant tells eFinancialCareers.com that the agencies are building out their coverage of hedge funds as a natural extension of rating asset managers for risk, and are looking for analysts to join teams already in place.

The issue, he says, is that competition for talent is fierce and rating agencies are in "permanent recruitment mode" because many in the market view a stint at an agency as a stepping stone into a bank or fund manager.

"Ratings agencies just don't pay market rate," the consultant says. "It's difficult, because they could hire in equity analysts, say from a fund of funds, who understand the underlying of hedge funds. But funds of funds pay better."

The move to cover hedge funds, by such players as Moody's, S&P and Morningstar, comes as the industry becomes more mainstream, reports the Financial Times.

A recruiter who works for Fitch says he is unaware of any moves by the firms to cover hedge funds, though the agency is seeking to fill roles in structured finance and elsewhere. S&P was not immediately available for comment.