“Many investors who devoted the late 1990’s to making money are now more interested in keeping what they have left,” writes Danny Hakim in today’s New York Times.

“This desire is fueling the hedge fund industry. Hedge funds, exclusive funds that cater to the wealthy and to institutional investors, are theoretically designed to minimize losses in bad times — appealing when markets are going down or sideways.”

“Their rising popularity, though, has created greater competition for managers and analysts, a proliferation of new funds and a strain on the talent pool, according to several fund managers and consultants, who described a litany of job-hopping at top funds.”

” ‘There is such demand out there that individuals who might have felt they needed partners before, now might feel they can start their own firms and raise money,’ said Barry Colvin, chief operating officer of Tremont Advisors, a hedge fund industry tracking and consulting firm. ‘Quite frankly, they may be right.’ “

“Poor performance, especially at the funds that rose to prominence because of their technology investments, has contributed to several management shake-ups. But more often, big fund groups find their top deputies simply want to strike out on their own. Consequently, some of the world’s largest hedge fund firms are splitting up, closing funds or losing top partners and analysts.”

“Many mutual fund firms have, meanwhile, been opening hedge funds both to serve their wealthy clients and to pre-empt the defections of their best money managers to hedge funds.”

“Yesterday, David Felman, manager of the $7.1 billion Fidelity Mid-Cap fund, left Fidelity, a subsidiary of FMR, to join Andor Capital of New York. Andor is an offshoot of Pequot Capital Partners, the world’s largest hedge fund, at about $15 billion, which is being split in two by its top partners, Arthur J. Samberg and Daniel C. Benton.”

“There has also been a lot of movement between hedge funds. Jeffrey R. Perry, one of four investment partners at Zweig-DiMenna Associates, just left that firm to join a rival, S.A.C. Capital, which had already hired a top technology analyst from Zweig earlier in the year.”