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Cap Rules Pushing Top Bankers to Hedge Funds

Escalating capital requirements may be a thorn in the side of big banks. For hedge funds, they may be a blessing, at least according to Deutsche Bank Chief Financial Officer Stefan Krause.

Bulge bracket banks like Deutsche Bank are seeing their top-flight talent defect to hedge funds, which can now offer a higher compensation ceiling than larger public firms that have been forced to exit certain risk-heavy businesses, like proprietary trading, he said, according to FIN Alternatives. Bonus caps and longer vesting periods aren’t helping either.

Krause said the majority of top bankers who have left the firm recently have landed at hedge funds. "Our business is people-contingent and you'll never be able to pay competitively," he said.

Recruiters in the U.S. and Europe say hedge funds aren’t making huge net adds, but are hiring selectively from large banks. It’s usually the cream of the crop – oftentimes bankers who make the move voluntarily, they say.

New York’s Millennium Capital Partners is said to be hiring, as is BlueCrest and Man Group in Europe. Hedge funds are being particularly active picking off commodities staffers as larger banks are forced to cut resources.

Activist hedge funds, like Leon Cooperman’s Omega Advisors and Daniel Loeb’s Third Point Ultra, have enjoyed a lucrative 12-month stretch and could be ideal landing spots for displaced bankers.

Rookie Recruiting Mistakes (eFinancialCareers)

If you’re thinking about getting into recruiting on Wall Street, or if you just got started, be sure to avoid these common mistakes if you want to survive.

Risky Business (WSJ)

Berkshire Hathaway has poached four top executives from AIG, including Peter Eastwood, the head of its Americas property-casualty unit. Berkshire is looking to build out a unit that offers insurance coverage to large corporate clients that take on large risks.

Post-Lunch Window (eFinancialCareers)

If you want a recruiter or hiring manager to have a greater chance of seeing your application, apply during the middle of the afternoon when most people start to slow down.

Healthy Pay Raise (WSJ)

Ronald Kruszewski, chief executive of brokerage firm Stifel Financial, received a 23% bump in pay in 2012, earning roughly $7 million in base salary and bonus.

Fun in the Sun (FIN Alternatives)

Big paychecks and year-round sun? Yes please. Representatives from Miami's Downtown Development Authority are headed up north in May in an effort to lure hedge funds to relocate to South Beach.

Job Security (Yahoo)

The best job in America is an actuary, at least according to CareerCast. There is a high demand for actuaries and the pay is decent.

Pay Up (Financial News)

More than 100 ex-Dresdner Kleinwort bankers achieved a landmark victory last week when an appeals court ruled that Commerzbank must compensate them for unpaid bonuses.

Buzz Around the Office

Say Cheese (London Evening Standard)

A gang of serial thieves in London were jailed after posting a series of incriminating pictures on Facebook. The best one? A photo of one of the suspects eating a sandwich filled with cold hard cash.

List of the Day: Resume Mistakes

Not getting any interviews with your current resume? There’s a good chance this is the problem.

  1. It’s too long.
  2. You aren’t including a cover letter.
  3. Your achievements don’t match the job description.

(Source: Business Insider)

AUTHORBeecher Tuttle US Editor

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