As we speculated back in November, hedge fund jobs may yet become the prerogative of trustafarians and the independently wealthy who can live on subsistence wages while waiting for better times.
There are signs that this may be coming to pass. Yes, some hedge fund managers accumulated considerable wealth last year, but the belt is being tightened severely.
As is widely reported today, the three founding partners at GLG are doing a Vikram and paying themselves a mere $1 salary and no bonus.
At the same time, RAB Capital - fresh from trimming 50% of its staff - has promised to implement a new pay regime which will align bonuses more closely to performance and pay people a lot less when times are bad. Compensation costs were down 63% last year.
Arguably, the belt tightening has been a long time in coming. Despite presiding over a 39% fall in assets under management last year and a 56% reduction in net income, GLG reduced 2008 compensation expenditure by just 15%.
Meanwhile, RAB Capital turned a 36m profit in 2007 into a 17m loss for 2008 its and assets under management fell 74%.
More job cuts may be in order. However, employment lawyers say people working in the hedge fund sector are ill-served by employment law - many are partners of the firms they work for and have little or no employment rights if they're let go. This apparently comes as a shock.