The private side is appealing to some with its locked up capital and its long-term investment horizon, as are family offices with their flexible investment mandates. The most common requests though are for the mutual fund world. Yes, there are hesitations about ‘sleepiness’, perceived meritocracy, and the more muted bonus potential, but for many this is out weighed by the combination of perceived durability, long-term career stability, and high base salaries uncorrelated to performance. Sure, they’ll have to give up the ability to short but of late very few people have been able to impress with their alpha short returns.

Compensation is presumably the biggest factor at work here making people rethink their industry choices. Comp at year-end 2015 was considerably down from 2014. For many front-office folk at hedge funds, bonuses were down 30-50% and in 2016 the outlook already looks bleak given Q1 performance, particularly if the fund is significantly under its high water mark. There are other factors at play as well. There’s a growing frustration from longer-term investors that their funds are reacting to current market conditions by making shorter term, quicker trades. People have been burned by their start-up funds not being able to get to scale, and by founders of established funds deciding to convert to family offices. There’s also the overriding intellectual frustration felt by these smart over-achievers who just haven’t figured out how to generate returns with this market volatility. Their hope is they will do better in a different setting.

These factors aside, the conversation about quitting hedgefunds still normally turns back to money. As a senior long/short equity analyst recently put it to us, with a characteristic mathematical rationale, “Would I take a seat at a long-only where I can make $500k a year for 20 years, versus making $2m in a hedge fund one year, getting blown out the next, followed by a who-knows-how-long period on the beach? I’d take that trade.”