Salaries rise as hedge funds poach from the middle office

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Chris Sevenoaks, a consultant at recruitment firm Finance Professionals, says hedge funds are keen to poach product controllers and credit analysts from investment banks.

"This year, hedge funds' focus is on collateralised loans," he says. "Funds are looking for the kind of people you find in the middle office of investment banks - people who have specific product knowledge on the credit side."

Rising salaries replace the lure of bonuses

As hedge funds scour the middle office, Sevenoaks says they are finding it necessary to depart from their tried and tested strategy of paying low salaries while promising high bonuses.

"Six months or so ago, a hedge fund could offer a salary that was 10,000 less than an investment bank, and claim that coming to work for them was an investment in the future, with the potential to earn a huge bonus," he says.

He adds: "Nowadays candidates are a bit more alert to the potential for hedge funds to underperform, and funds are having to match salaries in banks - they don't like it, but they don't have an awful lot of choice."

Despite uncertainties about hedge fund bonuses, Sevenoaks says credit analysts are still likely to find themselves better off moving. In a bank, he says someone with a first time ACA pass and a few years' experience of credit analysis will typically earn 60,000, plus a 15% bonus. In a hedge fund he says bonuses are more likely to average 40%.

But there are no guarantees, and it may be worth bearing in mind that as a recruiter trying to persuade banks' analysts to quit, Sevenoaks has something of a vested interest in making the sector seem appealing.

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