Dillon Read Capital Management is axing employees. Prop traders should walk into new jobs. Back-office staff may be in for more of a crawl.
The US-based hedge fund business, part of UBS, employed 250 people in midtown Manhattan, according to the Financial Times. What with the fund being closed after losing 62m in three months on the US subprime mortgage market, their future looks dubious.
Most of the DRCM jobs are being shifted back into UBS, according to the FT, but some will be cut. It's fair to assume that any of the 120 or so fixed income prop traders directly responsible for losing the average of nearly 700k a day will be dumped, but so (we assume) will any of the remaining staff who worked in support functions such as HR and finance and won't be needed any more.
Noel Marshall, managing director of recruitment firm Finance Professionals, says the future for hedge fund back-office staff is looking generally bleaker than it once did.
"They [hedge funds] have been aggressively acquiring people and paying decent money," he says. "It's all great while everyone's making money, but a big wagon has rolled and my gut feel is that a few carriages are going to fall off the back."
Although the bigger hedge funds are still hiring back-office staff, Marshall says the smaller ones are starting to wonder if they've been a bit gung ho: "They're looking at their cost base and wondering if they've over-expanded a bit."