Hedge funds are now said to be the fastest area of growth in the US financial services sector. And, according to a recent survey undertaken by Greenwich Associates, more than half of US hedge funds are planning to hire more fixed income traders and analysts in the near future.
Traders can earn base salaries of up to $200,000 working in the hedge fund industry. Analysts can expect a base salary of up to $125,000 - and even back office staff can take up to $75,000 per annum. Bonuses, too, are generally bigger than in investment banking.
And the lure of the hedge fund industry is beginning to worry even the regulators. There is said to be concern in London that the hedge fund 'brain drain' may soon mean that investment banks can only attract second-rate traders who may not be up to the mark and sustain heavy losses.
According to Institutional Investor, the top 5 hedge fund earners pulled in $2.5bn in compensation between them last year. Even the big investment banks can't compete with that.