Need for Qualified Investment Professionals Intensifying Among Hedge Funds
August has gone down as the worst four weeks in more than a year for the hedge funds. But there is some hope that last month might have been rock bottom for the $2.4 trillion dollar industry. That would be welcome news for countless asset managers who have come to rely on the alternative investments to boost their bottom lines. Now, amid the turmoil, executive recruiting firm, A.E. Feldman, says when it comes to hedge fund jobs, the need for qualified investment professionals is growing. And according to the Associated Press, the hedge fund industry has caught the attention of some new players.
Of the 2,600 U.S. hedge funds that reported to performance tracker Barclay Group, 75% of them lost money last month. The research group reports that the average hedge fund lost 1.4%. So-called fund-of-funds, which seek to spread the risk of hedge fund investing by selecting a portfolio of these funds, also lost 2.16%.
Despite the losses, the possibility that the Fed will cut interest rates in the upcoming FOMC meeting is generating optimism that the markets could begin to reverse course in a matter of months. “There’s been stabilization in the fixed income market, less volatility in equities, and credit spreads improved a bit,” Ken Heinz, president of Hedge Fund Research told the Associated Press. “You may see a more stable environment moving forward.”
Today hedge funds are found in many pension funds’ and endowments’ portfolios. In fact, they are a staple for all types of asset managers who have come to rely on them to boost their bottom line, according to a recent study conducted by consulting firm McKinsey and Institutional Investor’s U.S. Institute. The study found that two-thirds of all traditional asset managers now offer hedge funds, and more than one-third of institutional revenues of those firms come for alternative products. It seems that the industry continues to attract investors in search of big risks and bigger returns.
The allure of deep pockets may be one reason why the growing and lightly regulated hedge fund industry is also attracting new players. The Associated Press reports that hedge funds are fertile ground for business school professors hoping to test their theories in a field known for big risks and bigger returns. “MBAs and, to a less extent, Ph.D.’s have taken over the financial world,” Roger Ibbotson, a professor at the Yale University School of Management and co-founder of a hedge fund told the AP. “What we study is what people in finance know and use.”
The trend also helps B-schools remain competitive in attracting the best students. William Goetzmann, a Yale business professor, also told the AP, “Hedge funds are part of a new frontier of finance, boosting universities that draw students who are interested in the industry.”
