A combination of higher pay at their existing jobs and lower hedge fund performance appear to have plugged the flow of investment bankers heading for the HF industry, according to Nicholas Roe, Citigroup's European head of equity finance. "People don't necessarily feel that running a hedge fund or moving to a hedge fund these days is a get-rich-quick scenario," said Roe, "If anything, working for an investment bank offers some stability and you haven't got the headache of running your own business." Speaking at Reuters' Hedge Fund and Private Equity Summit, Roe noted that the banks have "raised their game" and recent hedge fund performance has changed people's attitude to one that HFs are not "the pot at the end of the rainbow as they used to." He said that, despite the change, bankers-turned-hedgies are not returning from whence they came, and there are still big names trying their hand at hedge funds, such as Benoit d'Angelin of Lehman Brothers and Charles Kirwan-Taylor of Credit Suisse.

Speaking of flows, Bill Maldonado, CEO of alternative investments at HSBC Halbis Partners (UK) said at the meeting that massive inflows of money into hedge funds from institutions are not the primary cause of recent lower-than-accustomed-to returns, as some have suggested. Maldonado pointed to other factors, such as low volatility, but did acknowledge that some strategies, such as merger arbitrage, have suffered from too much client money.