Ratings agencies in hedge funds push

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

A spokesperson for Moody's in London 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 the agencies are building out their hedge funds coverage as a natural extension of rating asset managers for risk, and indeed, they are looking for analysts to join teams already in place.

The issue, he says, is that the 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 940bn industry becomes less an alternative asset class and more mainstream, the Financial Times reports.

A recruiter who works for Fitch says while the agency is looking to fill roles in structured finance and elsewhere, he was unaware of any moves into hedge funds coverage by the firm.

S&P was not immediately available for comment.