While the debate rages on as to whether the economy is, indeed, displaying evidence of “green shoots,” numerous hedge fund firms appear to be taking matters into their own hands, repositioning themselves to benefit from any signs of improving investor sentiment. In particular, several firms have gone on recent hiring sprees in an attempt to lock in the best and the brightest minds from the considerably large pool of unemployed hedge fund workers.
Recent struggles within the hedge fund industry are well documented. In addition to the estimated 1,500 funds which were forced to close in 2008, a vast majority of funds experienced a significant fall in assets under management. Unable to generate substantial profits from fee generation, this forced numerous firms to cut expenses and/or lay off workers. However, a renewal in industry hiring could signify optimism amongst some of the industry’s major players.
As the markets rebound from their lows of the past year, once-wary investors are beginning to retest the markets. Repositioning themselves for an impending rebound, many firms are actively raising capital, while adding staff to fill sales and marketing roles. In fact, Citadel, RBC Capital Markets, Artradis and Tribridge have all announced recent hires.
Furthermore, the prime brokerage business, which offers fund managers a variety of services ranging from clearing to securities lending to financing services, is another area experiencing growth. Firms such as Credit Suisse Group AG and BNP Paribas SA, in particular, have announced their plans to expand prime brokerage services. This expansion is especially pronounced in Asia, where the region’s hedge fund industry is expected to resume its prolific growth.
Hedge fund hiring by some of Wall Street’s biggest players could also signify to makings of a turnaround for the hedge fund industry. Citigroup Inc. and Bank of America Corp.’s Bank of America Merrill Lynch have also added new hires to their hedge fund businesses. Meanwhile, in one of the largest hiring moves to date, Morgan Stanley announced late last week its intentions to add 400 new hedge fund hires in areas ranging from sales to trading.
Recent hiring patterns would suggest that hedge fund firms are retooling their infrastructure, positioning themselves to benefit as investors return to the industry. In the process, this news perhaps offers a glimmer of hope to the throngs of idle and out-of-work former hedge fund employees.
