THEY may be partly responsible for the mess the banks are in but bankers are not sticking around for the clean-up. Many top bankers have lost confidence in their institutions and are quietly heading for the exit. The smart ones, it seems, are going to hedge funds.

GLG, Europe’s largest hedge fund, recently poached Goldman Sachs partner and top trader Driss Ben-Brahim. The bank was “not amused” by Ben-Brahim’s defection, according to one source.

Karim Abdel-Motaal and Bart Turtelboom, the global co-heads of emerging markets at Morgan Stanley, were also snapped up by GLG.

Last week, Fauchier Partners, a fund of hedge funds, announced the appointment of Jamie Kermisch. Also from Morgan Stanley, he has been in investment banking for 19 years. This follows high-level recruitment by Citadel, Tudor Investment and CQS, which has already drafted in some 45 people this year.

One hedge-fund headhunter summed it up: “My job at the moment is to take people out of banks.” A perfect target is a skilful trader - preferably with a good record in emerging markets - who is feeling “rocky and unloved”.

Pablo Guerra from the headhunting firm Hammond Partners said: “Until June last year this was a two-way street: people moved from hedge funds to the trading desks in investment banks and vice versa. But with the credit crunch it’s becoming more difficult for the banks to allocate capital to these guys. Without the capital, they can’t trade and if they can’t trade, they can’t make money.”

Some investment banks are ring-fencing capital for their star players but if a hedge fund comes along offering uncapped compensation and, for the first time, more job security than an investment bank, it is not a difficult choice.

Even when the banks have sorted themselves out they are unlikely to go back to their old ways. “The investment banks will not be allowed by the regulators or their shareholders to accrue the same amount of leverage in future,” said one hedge-fund manager. “Hedge funds, on the other hand, have firepower and appetite for risk, so they are able to attract these people.”

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