Read it here. It quotes Greg Coules and Adam Herz of Hunter Advisors.
Coules and Herz make an excellent point (and a courageous one for a firm whose business is recruiting for hedge funds): In the past ten years or so, the talent followed the money, and the money was in hedge funds, but the majority of hedge funds are not an ideal vehicle for managing long-term money, as this blog has argued.
The ideal vehicle for managing money is long-term oriented, patient, and thinks like a principal, not an agent. In otherwise, something like a family office. Coules and Herz are betting that the market will move this way. Hunter Advisors, as far as I can tell, is the only recruiter shifting their thinking accordingly. I've been looking for a job for the better part of a year, with a specific focus on family offices, and all the other recruiters I spoke to have given me a litany of reasons why family offices are a terrible place to work. We'll see who has the last laugh.
I see only one countervailing trend: The goal of any money manager of great talent is to maximize both the quantity and the quality of the money he has under management. By starting your own hedge fund you can get the former, but often at the expense of the latter. At a family office it's vice versa, as most family offices are pretty small. Plus at a family office you're an employee. So there is a tension there. One way to resolve it is for family offices to pool their resources and create entirely in-house hedge funds and give autonomy to their managers. Another way is for hedge fund manager to do so well that they can fire their investors, as Soros has largely done. Another way is for hedge fund managers to convert their LPs into shareholders, a la Berkshire and Leucadia and (maybe) Steel Partners. Finally, we've started to see hedge fund managers like Value Act try to improve the quality of their investors by forcing them to behave more like family offices, with longer lock-ups. So I don't think hedge funds are completely going away.