It is the best of times and the worst of times. Hedge funds that were happily swimming along last week have found themselves between a rock and a hard place -- that hard place being Raj Rajaratnam.
The charges of insider trading brought against the Galleon Group founder have flummoxed the industry. In the wake of the six arrests over the weekend, federal investigators are stepping it up and going after more managers they think may have been involved. But the efforts to reign in insider trading have been spotty at best, particularly because it's difficult to prove. To combat that, investigators have been resorting to more aggressive tactics, like the wiretaps used to trap the culprits last weekend.
If the thought of increased federal scrutiny of this nature isn't enough to make buy a case of canned beans and flee to a hideout in wild Montana, you might want to take notice that hedge fund trends and hiring are having a pretty good run. According to a recent report from Heidrick & Struggles, an executive search firm for hedge funds, the industry is marking the best returns in over ten years. What's more, H&S partner Claude Schwab told FINS that hiring has picked up dramatically since August -- even though 2009 compensation is going to be down from 2008.
"These candidates are going to hedge funds or endowments or pension funds like CalPERS or traditional asset managements like PIMCO or to the prop desk. There is still is definite ability and demand to hire hedge fund talent," Schwab said.
Schwab added that "every major bank is having senior people leave to found their own hedge fund. In some cases you find them joining a firm, but a good chunk are starting their own hedge funds."
If you're still nervous about joining an industry that's soaking up the spotlight, take heart in the successful track record of lobbying by the industry.
---
For tips, questions and comments, contact us here.
To get the latest finance career news, follow FINSider on Twitter!