Big hedge funds are shutting up shop, smaller firms are struggling to survive. The exodus of prop traders from investment banks has led to a surplus of talent on the market, assets under management are shrinking and the business model of hedge funds is inherently flawed.
Well, maybe. For all the difficulties facing hedge funds, the hedge jobs market isn't doing too badly. Hedge funds don’t face the same pressure as banks to cut back on compensation and headcount during periods of contraction – some even expand.
These, suggest hedge fund recruiters, are the safest jobs in hedge funds now.
1. Equity portfolio managers
Yes, equity funds have struggled during the summer - the HFRI equity hedge fund index was down 3.1% in August and 1.7% in September – but there are exceptions. BlueCrest Capital Management equity strategy is up by 10% following a big recruitment drive last year, and other funds are looking to emulate this success.
“A lot of hedge funds are building equities teams in anticipation of an upturn,” says Helen Morrison, a former Goldman Sachs and Lionsgate Capital Management client services executive who is now head of retained search at hedge fund headhunters Elliott James Consulting.
2. Money management and trading jobs at large hedge funds
There’s a flight to safety in size. Man Group has largely stemmed its cost-cutting exercise and larger firms like Bluecrest, Brevan Howard and Millennium Capital Management continue to hire. This, suggests Barry Seath, owner of hedge fund focused recruiters Mirage Recruitment, is an opportunity.
“We’re seeing a lot of larger funds with $1.5bn plus in assets under management hiring skilled traders with a strong track records from smaller players which are struggling,” he says.
“The thing hedge funds need now is critical mass,” says Henderson. “The days of leaving a prop trading job in a bank and getting backing from your old employer are gone. Hedge funds need asset raisers to survive,”
Specifically, says Henderson, there’s an uptick in demand for those focused on UK and Scandinavian clients currently.
4. Non-directional hedge funds
The whole concept if generating alpha regardless of over-riding market conditions is an appealing one currently and it’s here were hiring is focused. Henderson says anyone who can bring in “alternative sources of alpha” will he considered currently.
“Non-directional hedge fund strategies have performed relatively well, and we’re seeing strong demand from firms with strategies including market-neutral, volatility, relative value credit and macro,” adds Anthony Keizner, head of the hedge fund practice at headhunters Glocap.
5. The chief operating officer
Hedge funds are dealing with ever-higher compliance costs, increasing IT complexity and greater demands from regulators. Those at the top who can sort out the nuts and bolts of the organisation have never been safer, suggest headhunters.
6. Multi-skilled developers
Senior executives at quant-driven hedge funds have been quick to call the end of the human trader, gradually eliminated by ever-more sophisticated algorithms that increasingly win out. The result has been an increase in the hunt for programmers. If you can code in C++, this is a benefit, but hedge funds are also asking for Python, Java and Polyglot as skills. Having a few skills under your belt is therefore essential.
7. Regulatory accountants
Compliance staff are hot, even if smaller hedge funds are outsourcing for third-party providers, but so too are accountants who can help appease regulators, says Heath. “Accountants with good regulatory reporting experience are in demand,” he says.