Money talks, hedge fund employees walk?

So Stuart Handel, chief operating officer of hedge fund Eton Park Capital Management, is leaving the firm to return next year to Morgan Stanley, where he will head the firm’s global prime brokerage operations. The obvious question: “What is wrong at Eton Park?” Handel is, after all, the fourth person to depart from the firm this year. But performance has been decent and there are no whispers that the firm has been misbehaving. Could it be simply that the money is better back on Wall Street?

If hedge fund returns are coming down but operational costs remain the same or even increase, profits are clearly being eaten into, and that means smaller bonuses all round.