At a time when major banks are thought to be gearing up for layoffs, the hedge fund world is not only hiring like gangbusters but also paying new employees big bucks.
It's been a whirlwind week for hedge fund managers. Securities and Exchange Commission members adopted a proposal they introduced in November calling on hedge-fund and private-equity managers with more than $150 million in assets, or with 15 or more clients in the United States, to register with the agency. SEC commissioners voted 3-2 to approve a Dodd-Frank measure calling for about 750 private funds to disclose "census-like data" about their investors and employees, the assets they manage, potential conflicts of interest and their activities outside of fund advising.
Some much-hoped for news from the SEC also came this week when it was announced that at its open meeting SEC officials extended their deadline for unregistered hedge funds to register under the Dodd Frank rules. The original July 21, 2011 deadline was extended to March 30, 2012.
It's no secret that hedge funds have attracted some significant inflows this year. Early this year, hedge fund launches also reached their highest levels since 2007. Hedge fund performance has actually declined 2.7 percent so far this year due in part to the sovereign debt crisis, according to Hedge Fund Research's HFRX index.
C-Suite and Compliance Execs Sought
That hasn't stopped funds from seeking out new C-suite executives, compliance professionals, and more-often from outside of the hedge fund industry, and often for significant salary and bonus packages.
"We've seen a huge spike in job openings from all of our clients for the past six to eight months," says Kyle Ramkissoon, principal and founding member of IJC Partners LLC, a recruiter focusing on single-manager hedge funds, funds of hedge funds, multi-manager complexes, and broker-dealer proprietary trading groups.
Ramkissoon adds that there's been "a pretty broad based rally for talent, and with it, the compensation packages have gone back up." He also notes that new launches have created a huge demand for certain types of products, with some funds beefing up currencies and commodities staff, and many of these employers offering compensation packages that are 20% to 25% higher than they were a year ago. IJC Partners is also seeking experienced traders in the futures/FX space.
Interestingly, some of the regulatory hurdles that are plaguing banks-which raised many salary levels as an alternative to stock-based bonuses but found a fixed-cost structure too confining-have created a major opportunity for compliance professionals. In part, compliance experts are being sought at many funds to make sure they're prepared for one of features of Dodd Frank registrants: surprise examinations by the SEC next year.
"We're seeing demands for chief technology officers, chief compliance officers and chief operating officers," says Ramkissoon, adding that the "really big funds," many of which have already registered under Dodd-Frank, are hiring people former regulators as well as attorneys who know what SEC audits might look like.
Jeff Kollin, a principal with accounting and professional services firm Rothstein Kass, in New York, agrees. "Registered hedge funds under Dodd-Frank are going out into the industry to hire the best in breed-people with SEC experience, for instance, to fill chief compliance officer positions and other compliance roles," Kollin told eFinancial Careers News.
Meanwhile, "From the IT side of it, the majority of funds out there are implementing new compliance systems as well as building out trading systems to accommodate new asset classes," says Ramkissoon.
Job titles sought include
· Team Lead/Architect
· Senior Software Engineer
· Software Developer, and
· Algorithmic Trading Developer
Kollin suggests that members of the major accounting firms will be among those outside the hedge fund community who may wish to explore opportunities in the alternative investments space.
"Our 2011 survey reveals that as hedge funds become more institutional in nature, they are adding to executive management teams, with a strong emphasis on operations, compliance and technology, as well as on capital raising and investor communications." says Howard Altman Co-CEO and principal-in-charge of the Financial Services Group at Rothstein Kass, in his opening remarks to the company's recently published 2011 Hedge Fund Outlook.
"As the community adds to its ranks, it continues to draw talent from other segments of the financial services industry," says Joseph Pacello, a Tax Principal in the Rothstein Kass Financial Services Group, noting hedge funds' propensity to have turn to regulatory agencies to find candidates able to oversee compliance efforts.
But it goes well beyond that, says Kollin.
"Hedge funds represent a growth market once again," he told eFinancialCareers News. And, "It's becoming a more mature industry which can draw strong accountants, CFOs and controller candidates from accounting firms like Rothstein Kass,Ernst & Young, and PwC, as well as other segments of the financial services industry."