- Hedge funds may cut as many as 10,000 jobs this year as they struggle with their biggest losses in almost two decades, according to estimates by executive search firm Options Group. The industry has already eliminated 3,000 to 5,000 jobs, out of an estimated 150,000 worldwide; layoffs may double by year end.
``It's bad out there,'' said Karp, whose firm has tracked hedge-fund hiring since 1995. ``Generating returns is not easy at the moment and as funds look to cut costs, the best way is to let go of people.'' ``This is the worst year for headcount reduction for hedge funds that I have seen,'' said Frank Carr, managing partner at Centennial Advisory Group LLC, a Stamford, Connecticut-based executive-search firm, which has placed candidates in hedge funds since 1997. ``I expect the job losses to drag out longer than in 1998 given what's happening in the markets at the moment.'' ``Five percent of firms will be hiring, 20 percent will be gone and the rest will be sitting on their hands waiting for the storm to pass,'' he said.
Hedge fund Ramius LLC this week laid off about 40 of its 200 workers, while Perry Capital LLC cut more than 20 jobs, or less than 20 percent of the total, according to people familiar with the New York-based firms. Ramius, founded by former Shearson Lehman Brothers Chairman Peter Cohen, dismissed some of its staff after its offshore multistrategy fund lost as much as 11 percent this year through September. Kara Findlay, a Ramius spokeswoman, declined to comment. Perry, whose flagship fund has fallen 8.5 percent this year through September, has fired portfolio managers, analysts and traders in its equity unit as the firm reduces investments in global equity markets. Perry, which manages $11 billion, hasn't had an annual loss. ``The traditional long/short equity model is undergoing rethinking,'' Perry said in an e-mailed statement. Long/short firms bet on rising and falling stock prices. (HAL9000 is destroying everything)
Investors withdrew a record $43 billion from hedge funds last month, according to TrimTabs Investment Research, the most since the Sausalito, California-based firm started tracking the industry in 2000.
6 comments:
TM: Good thing you are a fund of one!!! Can you fire yourself?
Stay in the game; there is another cycle coming.
I'm going to fire my imaginary trader ;) I need to find someone to blame! I'm perfect after all. Gosh darnit.
Hi Mark,
Have you noticed today that coal stocks are perking up? Do you think this might be the first sign of people realizing coal does not equal oil, and there are some great earnings on the way?
Off-Topic
Mark, I think this week, is the first time in many weeks, that fundamentals actually made some sense in terms of what outperformed and what has not.
Given the recession scenario worldwide, and the credit status, its again, the bigger capitalization stocks... so all the small ones are out. Coal is showing some life as its hard to get off coal.. but ones with more thermal coal seems to be doing better. BTU. That seems to have sparked some moves in bucy and joyg - which should benefit from falling raw costs.. of which their clients are the same large caps without credit issues. And natgas, (the stocks) are just cheap relative to where they were a year ago, with natgas being the same price. recession stocks still holding up, albiet volatile. But I'm noticing that its the global themes that are still holding up better.
anyways, tgif - have a good wkend
Mark, I see you are restoring the "generals" portfolio of earlier this year... coal, fertilizer,solar, minus infrastructure, plus health care....
Could you please comment on what has changed, is it that you feel we are bottoming out?
cheers
A
Jason
BTU reported an incredible quarter and maybe hedge funds have extinguished much of their merchandise
As I said these are all just trading vehicles until we have sustained moves. JRCC was up 20% today - I don't like that sort of frentic move - I'd rather see weeks of +3%, +2%, -1%, -2%, +4% type of action. But for now its a trade and they stopped making lower lows for the first time in months.
I don't think earnings mean one thing. When the selling pressure lets up, they go up. Natural gas had a similar situation today.
RMJ,
I hope you are right and I am wrong. But I think it was just the let up of supply. I though JOYG had a bad week until Friday. I was shocked it was down in the $20s when I looked yesterday considering it announced its stock buyback in low $40s? JOYG lower to end the week then the start. I'm watching that one over BUCY due to buyback. I just think these are going to act like banks did last winter and spring - they can have oversold rallies but not much real long term support. Until they prove otherwise that is how I will treat them.
NL,
just trades on generals - I have only 3 positions in global growth so I can make them larger stakes now. Whereas I used to have 7-10-15 whatnot. MOS has hit $30 for 2 weeks straight as a bottom so each time it goes there I load up, and sell off into decent lifts. POT acted poorly this week - I assume more hedge fund selling as its more widely owned but earnings coming soon. JRCC basically represents a bunch of old coal stocks all in 1.
Solar is so oversold, I could buy SOL at $6 this week - are you kidding me. LDK has upped guidance like 4x this year? and still demolished. All the solar I own is at 3-5x 2008 earnings. It is outrageous. Meanwhile SPWR was run up 22% on a "ok" earnings report. Just trades.
healthcare i actually am holding - THOR is my favorite and almost broke out. A reader also mentioned EBS which I'm looking at. Healthcare should do better in a recession so I'm ok with holding those as long as the market doesn't drop 10% a week. They were the last group to really fall in this past 6 week straight down move.
Have a good weekend.
Post a Comment