[ by Melanie Gretchen ]

Hedge funds are hurting.

As lousy trading volumes hit hedge funds' bottom lines, staff cutbacks are imminent, according to the results of a new study on buyside staffing by Greenwich Associates.  The study surveyed 232 head traders and traders at numerous buyside institutions, including hedge funds and asset management firms, corporate treasuries, pensions, endowments, banks and insurance companies.

When asked participants about the organizational structure, staffing levels, budgets and operations of their trading desks, Greenwich discovered:

• 44% of hedge funds participating in the study said their 2012 trading desk budgets were reduced from 2011.
• 43% of trading desks said they were shrinking budgets.
• Another 40% said budgets were unchanged versus their 2011.
• Only 17% of hedge fund respondents said they were increasing trading desk budgets.

What that means: Considering recent equity trading volumes haven't broken past anemic, hedge funds are moving faster than other types of institutional investors to pare desk costs.

Of the participants in the study:

• Roughly 20% said their 2012 budget was reduced from last year
• About half the institutions said their budgets were unchanged over the past 12 months
• Many maintained the status quo of reduced resources in place since financial crisis-era cutbacks.

For further details, go to [Traders Magazine, 10/9/12].