Hedge funds lose some of their allure for bankers

By Jane Merriman

LONDON (Reuters) - Hedge funds are finding it tougher to hire investment bankers than they did previously because they are no longer seen as a get rich quick alternative, prime broking executives said on Tuesday.

Bankers have beaten a path to hedge fund doors in past years, eager to grab a share of the substantial rewards on offer from the fast-growing sector.

"The flow has somewhat slowed," said Nicholas Roe, European head of equity finance at Citigroup (C.N: Quote, Profile, Research, Stock Buzz), speaking at Reuters' Hedge Fund and Private Equity Summit.

He said hedge funds were finding it more difficult to hire in the City of London financial center these days because investment bank pay had risen while hedge fund performance had slowed.

"People don't necessarily feel that running a hedge fund or moving to a hedge fund these days is a get rich quick scenario. If anything, working for an investment bank offers some stability and you haven't got the headache of running your own business."

He said as a result the talent pool for new hedge funds starting out was quite thin.

"The investment banks have raised their game and given the performance of hedge funds in recent years people haven't seen it as the pot at the end of the rainbow as they used to."

Mark Haas, global head of prime brokerage at Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz), said the prime brokerage industry had lost an extraordinary number of people over the years to hedge funds.  Continued...