Who cares that salaries are lower at hedge funds?
Needless to say, banks have whacked up salaries. Hedge funds, however, have not.
Jim Nairn, a headhunter who covers hedge funds for The Cornell Partnership, says that with a few exceptions, hedge fund salaries are capped at 150k, but tend to average out at 100k. By comparison, top salaries in banking are now 300k+.
The differential doesn't appear to be putting bankers off. Yesterday it emerged that Brevan Howard had poached its fourth trader from Morgan Stanley since September.
Barry Seath, a director at Mirage Recruitment, says people are willing to move out of banks and into hedge funds for, 'significant cuts in their basic pay.'
"A lot of people in banks have had a very difficult time over
the past few years and are only too happy to move to a hedge fund given the chance. When bonuses are factored in, they know that they can earn more overall," Seath says.
This is fortunate, given that hedge funds keen to add headcount.
In a recent report, Heidrick & Struggles pointed out that many established hedge funds (AQR, Brevan Howard, Citadel, Caxton), spent the tail end of 2009 launching new funds, which recruiters say they now need to hire for. Among others, Caxton Europe, Moore Europe, Tudor Capital and SAC Global Investors have all been adding staff.
However, Nairn says hedge funds are mostly interested in hiring employees of rival funds, rather than disaffected bankers: "From that point of view, it's a buyers' market - most bankers who are approached by funds are more than happy to make the move."
