Date: Friday, October 16, 2009
Author: Reuters.com

Hedge Fund Industry Trends - 2009: Heidrick & Struggles Issues Report onSearch/Recruiting and Compensation

NEW YORK, Oct. 15 /PRNewswire-FirstCall/ -- Heidrick & Struggles
International, Inc. (Nasdaq: HSII) has issued its Hedge Funds Industry Trends
2009, the company announced today. The report details hedge fund search and
recruiting trends, as well as compensation activity and salary and bonus
ranges, for the first three quarters of 2009 as funds have sought to re-launch
and re-brand themselves in the wake of the economic crisis.


Highlights include:
    --  Competition for talent: Hedge funds are now competing for talent with
        endowments, foundations, traditional asset managers, and asset
        management and proprietary trading desks of banks.
    --  Bank brain drain: The summer of 2009 was active in fund launches and
        hiring as pay and trading constraints have driven a number of senior
        traders from banks to launch their own funds.
    --  Where the jobs are: Due to an asset-building frenzy, there is a
greater
        demand for experienced sales and marketing professionals as funds hope
        to capture sidelined assets, new assets, and assets from
        poorer-performing funds.
    --  Push downward on compensation: With more fund closings expected this
        year, and about half of funds still near their high-water mark or
        underwater, compensation bands are broken, and, on average, 2009 will
be
        a down year for compensation.

    --  Proprietary hedge fund roles increasing: While "prop desk" trading and
        hiring was dormant in Q1 and Q2, Q3 saw increased activity, according
to
        candidates interviewing for these roles.



Additional observations include:
    --  Funds jumping on top talent: In 3Q 2009, employers who had held onto
the
        viewpoint that "the talent pool will only get richer over time" were
        more active in hiring and taking advantage of the available talent.
        "Except for funds with $2 billion or less that are still trying to
reach
        their high-water mark, there is no more fence-sitting when it comes to
        picking up the top talent," says Claude Schwab, a partner at Heidrick
&
        Struggles and one of the report's authors. "The greatest candidate
        opportunities are in credit, distressed, equity long/short and macro,
        given the dislocation in credit markets and preference for more liquid
        assets."
    --  Guarantees much less likely than in the past: "But they still exist
for
        the best senior level marketing talent, especially in instances where
a
        candidate has multiple offers," says Mr. Schwab. The strongest 5-10%
of
        senior marketers are securing significant guarantees, with another
        20-30% of mid-to-senior level hires securing minimum floors. "But, in
        general, factors other than compensation are having tremendous
influence
        on individuals for all roles."
    --  Hedge fund asset-building frenzy: Q3 saw fresh money with a high-water
        mark re-set from sidelined capital and endowments, sovereign wealth
        funds, and retail.
    --  Slowdown in certain recruiting areas: By Q3 2008, the competition for
HR
        and recruiting talent among hedge funds had slowed considerably, and
by
        Q2 2009 the number of dedicated HR/recruiting personnel within hedge
        funds had significantly contracted. Many funds laid off all but their
        most senior HR/recruiting personnel, and, in some cases, valued
        HR/recruiting personnel have shifted into other roles (such as
investor
        relations).
    --  Not much fee compression: Hedge fund fees are not changing materially
        for survivors who are performing well. "Changes for the hedge fund
        business model are generally incremental, not revolutionary, regarding
        fees," says Mr. Schwab. "There are more substantial changes around
        liquidity, leverage, redemptions/gating, and transparency, and key
        decisions are being made regarding outsourcing versus
        self-administration of back- and middle-office processes, especially
in
        attempts to attract and keep investors."

    --  Dramatic fall-off in size of launches: There was a shift from 2008's
        multi-billion dollar launches to 2009's hundred million dollar
launches.
        "The largest fund launch in 2008 was bigger than twenty largest fund
        launches in 2009 combined," says Mr. Schwab.



If you would like more information about Heidrick & Struggles' Hedge Fund
Industry Trends 2009, please contact Davia Temin or Suzanne Oaks of Temin and
Company at 212-588-8788 or news@teminandco.com.


About Heidrick & Struggles
Heidrick & Struggles International, Inc. (Nasdaq: HSII) is the world's premier
provider of senior-level executive search and leadership consulting services,
including talent management, board building, executive on-boarding and M&A
effectiveness. For more than 55 years, we have focused on quality service and
built strong leadership teams through our relationships with clients and
individuals worldwide. Today, Heidrick & Struggles leadership experts operate
from principal business centers in North America, Latin America, Europe and
Asia Pacific. For more information about Heidrick & Struggles, please visit
www.heidrick.com.




SOURCE  Heidrick & Struggles International, Inc.

Davia Temin, or Suzanne Oaks, both of Temin and Company, +1-212-588-8788,
news@teminandco.com, for Heidrick & Struggles