eFinancialCareers

Hong Kong hedge funds are trimming headcount as an international slump in their industry forces them to raise cash and cut costs ahead of an anticipated surge in redemptions.

Outflows from hedge funds in Asia accelerated from US$2.1bn in August to US$4.3bn in September, according to figures from database Eurekahedge.

London-based GSA Capital also recently closed a Hong Kong office that was opened only last year, while US hedge fund Ramius is considering handing back its Hong Kong trading and advisory licences. More funds are likely to close down in Q1 2009, due to a massive outflow of assets under management, says one industry expert who asked not to be named.

Not surprisingly, the employment outlook within hedge funds in Hong Kong isn’t great, either, says Stephen Small, a director at Pelham Search Pacific. “Most firms are seeing returns falling and redemptions rising. This is creating a difficult trading environment which leads to retrenchment and redundancies,” he adds.

Small says it’s hard to make generalisations about the recruitment market, because “it depends on how secure the capital base of each hedge fund is. Hiring is on a case by case basis.”

Select funds are still hiring and see this as an arbitrage opportunity, according to Small. “They realise that good people are being affected by redundancies and, if possible, they will look to create a home for strong candidates who have been let go.”