03/11/09 Hedge funds may cut 20,000 workers worldwide this year, a record 14 percent of the industry's jobs

Richard Breeden, former head of the US Securities and Exchange Commission

Investment losses and client withdrawals are eroding fees .....

Hedge funds may cut 20000 jobs as losses erode fees
Jerusalem Post

....The dismissals will come on top of the 10,000 jobs that disappeared last year at the investment partnerships, according to estimates by New York-based Options Group, an executive-search firm. Employment peaked at 155,000 in 2007, and has since dropped to about 145,000, the firm said.....

....About 920 hedge funds, or 12%, closed last year, according to data compiled by Chicago-based Hedge Fund Research Inc. Of the 6,800 single-manager funds that remain, 70% lost money in 2008, meaning they can't resume collecting performance fees until the losses are recouped. Those fees, generally 20% of investment profits, are the primary source of cash used to pay bonuses.

Hedge funds fell an average of 0.51% in February and 0.59% so far this year, less than the declines in stocks and bonds, according to HFR. HFR's Fund Weighted Composite Index dropped 19% last year, the biggest decline since the Chicago-based firm began tracking data in 1990.

Hedge funds eliminated about 6.5% of jobs last year, when client assets fell 37% to $1.2 trillion from their peak in June, according to Hedge Fund Research. Banks and brokers have fired more than 272,450 workers, or 5.9% of their payrolls, since mid-2007, according to data compiled by Bloomberg.....

....Steve Cohen's SAC Capital Advisors LP, based in Stamford, Connecticut, cut 100 people, or 13% of its staff. The reductions included fixed-income traders as Cohen, 52, scaled back bond investing in favor of trading stocks. He manages $12b......

.....There are some pockets of hiring, recruiters said.

Higdon Partners this year helped Breeden Capital Management LLC find a portfolio manager in London for its European stock fund. The Greenwich, Connecticut-based firm is run by Richard Breeden, former head of the US Securities and Exchange Commission. Higdon also worked with New York-based Cantillon Capital Management LLC, founded by William von Mueffling, to hire a sales and marketing executive.

"Some funds are looking for investment people, maybe better analysts or portfolio managers," said Higdon. There's also a limited demand for distressed-debt managers, risk specialists, and marketing and sales people to help replace assets that were lost last year......

....Hedge funds are also taking a longer time to fill the few positions they have, recruiters said.

"The hiring process is turning back to the 1990s, when candidates had 15 to 30 interviews before being hired," said Michael Karp, chief executive officer of Options Group. .....

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