Finding a job in hedge funds and private equity firms, difficult under the best of circumstances, keeps getting harder.
Financial News is reporting that Cerberus Capital Management, whose returns have been hurt by its investments in finance company GMAC and the automaker Chrysler, is cutting 10 percent of its staff of 250. Cerberus didn't comment on the newspaper's claims, though it didn't deny them either.
For the displaced Cerberus workers to find work may not be easy. Because their staffs are much smaller, hedge funds and private equity shops are tougher to get into than banks. Moreover, they tend to be very selective.
"It's more supply of candidates in the market for a limited number of jobs," says Ken Murray, of Mercury Partners, a New York-based executive search firm with clients in the alternative asset and asset management industries. "It will be difficult for those people to find something equally good as they had."
Murray expects more layoffs unless fund redemptions improve. Estimates showed record numbers of investors withdrew their money from hedge funds, leading to speculation that many will close. "There will be individual funds that will do fine," Murray says. "Some will even do well. (But) that is a small single-digit minority."
For private equity, the picture isn't optimistic either. Many huge buyouts have gone sour as investors and bankers got cold feet. Several - including Blackstone, Carlyle and American Capital - have announced job cuts.
The news, though, isn't entirely bleak, according to Mitch Feldman, president of New York-based A.E. Feldman, an executive recruiting firm. He is having a strong first quarter and believes there remain plenty of opportunities for strong candidates in areas such as distressed funds.
"It's an unprecedented time," he says.