NEW YORK: Hedge funds may cut 20,000 workers worldwide this year, a record 14% of the industry’s jobs,as investment losses and client withdrawals erode fees.

The dismissals will come on top of the 10,000 jobs that disappeared last year at the investment partnerships, according
to estimates by New York-based Options Group, an executive-search firm. Employment peaked at 155,000 in 2007, and has since dropped
to about 145,000, the firm said.

“Hiring activity is much reduced and it’s going to get worse,” said Hank Higdon, managing partner at Higdon Partners
LLC, a New York-based search firm focused on financial services. “I don’t see markets improving at all.”

About 920 hedge funds, or 12%, closed last year,according to data compiled by Chicago-based Hedge Fund Research
Inc. Of the 6,800 single-manager funds that remain, 70% lost money in 2008, meaning they can’t resume collecting
performance fees until the losses are recouped. Those fees,generally 20% of investment profits, are the primary
source of cash used to pay bonuses.

Hedge funds eliminated about 6.5 percent of jobs last year,when client assets fell 37% to US$1.2 trillion from their
peak in June, according to Hedge Fund Research. Banks and brokers have fired more than 272,450 workers, or 5.9% of their
payrolls, since mid-2007, according to data compiled by Bloomberg.

Hedge-fund assets may fall an additional US$250 billion, or 21%, this year, estimates Huw van Steenis, a financial-
services analyst at Morgan Stanley in London. That would leave hedge funds, which cater to wealthy individuals and institutions,
overseeing about US$950 billion, the lowest since 2004.- Bloomberg