Just a year after the financial crisis hammered hedge funds and forced many out of business, the industry is back, looking for capital and poaching top talent from investment banking firms.
Hedge funds are luring pros from investment banks, endowments, foundations and asset managers, according to a report by the recruitment firm Heidrick & Struggles, reported by bankinvestmentconsultant.com In particular, hedge funds are looking to hire hedge fund specialists in credit, distressed debt, equity long-short, macro as well as marketing pros and human resource executives.
Credit markets have thawed and market returns for hedge funds in 2009 look to be the highest in a decade. The article quotes a Bank of America Merrill Lynch estimate pointing to 19 percent average annualized returns for hedge funds, with some of the top categories being convertible arbitrage (30 percent) and event-driven strategies (11.1 percent).
Investment banking firms such as Deutsche Bank, Citigroup, Credit Suisse, Goldman Sachs and Barclays capital have all been hit by defections to the hedge fund industry.
Wall Streeter Megan Nicholson worked for three-and-a-half years for Lehman Brothers and Barclays Capital in their capital introductions group. She was drawn to Raven Rock Capital LLC in Chapel Hill, N.C. for the entrepreneurial spirit and improved lifestyle of the new city.
Leaving Wall Street for the hedge fund industry isn’t a new phenomenon. One of the fathers of the modern hedge fund industry, Julian Robertson, followed the same path after working for Kidder Peabody & Co.