Hedge fund managers optimism about attracting more clients in 2008 is so strong that its creating a massive recruitment drive, according to one recruiter.
It appears that the hedge fund winners in 2007 in terms of performance and asset gathering expect to continue to do well in 2008 and are staffing up, said Jeffrey A. McCroy, a partner at Sextant Search Partners Inc., New York, which has a specialty hedge fund recruitment practice. Firms that kept their returns positive in 2007 and had a reasonable track record are expecting a very good year, Mr. McCroy said, adding that hedge fund managers with whom hes been talking expect new asset growth between 20% and 30% in 2008.
Mr. McCroy noted that supply and demand for investment staff seems to be balanced now, but as hedge funds prepare to accept even more institutional money, they are having trouble finding enough talented consultants, client relations and investor relations specialists, and experienced institutional sales and marketing professionals.
Mr. McCroy declined to name names, but said many of the largest hedge fund firms are moving aggressively to build the non-investment side of their businesses to satisfy institutional investors. There is a handful of firms all running to the same phone booth to find the very best marketing and distribution executives, he said.
But the talent stampede is not universal. The firms that had negative performance in 2007 especially those that didnt recover by the end of the year from the summers market turmoil and those that had trouble attracting capital do not seem to expect that their fortunes will change this year. They really arent doing much recruiting, at least so far this year, he said.