The Cooling Market for Hedge Fund Traders

madhedgefundtrader's picture

The tide is suddenly heading out to sea for aspiring hedge fund traders. Ilana Weinstein of the IDW Group, which specializes in hedge fund recruitment, says that the new financial regulation bill has fundamentally changed the supply and demand balance for hedge fund managers.

Star traders at major investment banks with great track records used to be able to pick and choose among the large funds bidding for their services. Now there is a torrent of talent pouring into the marketplace fleeing the onerous restrictions of the Volker Rule, pay caps, greater disclosure, and more scrutiny from the SEC. Low trading volumes have caused the banks to scale back from a first half hiring binge.

Hedge funds, whose own recruiting is driven more by capital flows, have also crimped new hiring, their own modest first half returns keeping new investors at bay. With short interest rates near zero, and the yield curve flattening beyond all recognition, the double digit returns of yesteryear are but distant memories. Instead, many hot shots are heading out on their own, setting up new boutique firms with substantially smaller amounts of capital.

Could we be setting up for a bonus draught like the one we saw in 2008?

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rocky89's picture

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VWbug's picture

if they are any good they can start their own fund or just trade with their own capital.

or retire now and enjoy life. You can live like a king on $5,000 or $6,000 a month in lots of warm climates.

that's chump change to any trader who has more than a year's experience.

alexwest's picture


With short interest rates near zero, and the yield curve flattening beyond all recognition, the double digit returns of yesteryear are but distant memories.


again this asshole... i wonder does he even run any money

or just shows off to get laid.. :)


#nterest rates near zero,

who said its bad??

since when cost of money equals almost zero

is bad... ????


#the yield curve flattening beyond all recognition

you can easily bet  on flattening or expanding 2-10

of course if you have balls for directional betting..


and on on ...big guns make money off volatility cause

THEY'RE MARKET..volatility is great..

 guy dont have a clue.


islander's picture

Most biological androids base their value of themselves on what they own. If you  currently allocate most of your assets in US equity markets, than you may soon have a very low  opinion of yourselves.

There s a hard rain coming , and  the  run

(drain) off will effect the world in a big way. 

Yes, even mighty Germany and Fascist China will be hit  hard. Hold on baby, its a one way ride to a world currency.

TrulyStupid's picture

Who'll be left to take the losing side of the bankster's manipulated trades?

Dr. No's picture

Makes sense to me.  As technology replaces other careers, HFT algos can replace hedge fund traders too.  Has your investment hotline moved to India yet?

Mitchman's picture

It couldn't happen to a nicer bunch of people.

jdrose1985's picture

Does that make them "mad hedge fund traders"?

Guess you'll have to change your handle to "daft hft"

ZackAttack's picture

All together now, circling index finger over thumb pad in the universal gesture of the world's smallest record player, playing 'My Heart Bleeds for You'.....



Such terrible, onerous restrictions! I'm sure this hardy libertarian lot would all be gajillionaires if it weren't for the heavy hand of government and its wretched injections of taxpayer capital. Anyone so brilliant and talented would be well-served simply to forego the banks and brokerages entirely and make their billions all on their own.

Actually, the only thing that would make me happier is to see it begin to be outsourced to the PacRim to someone making $9 an hour, without the wherewithal to buy congressmen.


Fred Hayek's picture

Why would you assume that they're a libertarian bunch?  A recent New York magazine cover feature on Blankfein and Dimon and the progress of their relationship with Obama pointed out that Blankfein and Dimon like, the article said, most all their colleagues, are democrats.

There's actually a degree of honesty in that in so far as it's them admitting that they think gov't, with the help of extra super special people like, oh, investment bankers, should run everyone's life.

(not to say that there aren't plenty of repubs similarly deluded)

aerojet's picture

Seriously.  I can't think of another group of people so in need of a comeuppance.

Mr. Anonymous's picture

The only good hedge fund trader is an unemployed hedge fund trader.  They are far too dangerous to give a desk and access to tradeable capital.

binomial's picture

While 2008 was a rather dry year for me, if you're ordering a "bonus draught" for 2010, then I'll have a Guinness!

mephisto's picture

The word is "there's no money in banks any more". Have heard that more than once this summer. As long as those are FDIC insured banks, I don't have a problem with that.

I think GS/MS are banks forever, the next generation of pure IBs may be Citadel etc, if they can figure out a business model that works.

drought not draught, no?