“The financial industry has been continually downsizing since the financial crisis, which has resulted in a large number of ex-employees leaving to start hedge funds,” he said. “Many of these managers have now closed shop in the realization that running your own business is actually much harder.”

A bonus can be as high as $50 million a year for a star hedge-fund manager, while hedge-fund base salaries are typically lower than for other, more-stable jobs in the finance industry, according to Principle Partners’ Tan.

$5 Million

One hedge-fund manager Tan knows was earning more than $5 million a year at a U.S.-based hedge fund’s Asia and New York offices before 2008, primarily from performance-related pay, he said. He took a job at an asset-management company where he consistently earns less than $1.5 million annually and prefers the stability, Tan said.

Hong Kong is Asia’s largest hedge-fund center with 32 percent of regional industry assets in the first half of 2012, according to London-based trade journal AsiaHedge. Singapore made up 14 percent of regional hedge-fund assets in the first half last year, it said.

The region’s hedge funds rely on investors in the U.S. and Europe for a large part of their capital. Hedge funds in Hong Kong depended on American and European investors for more than 60 percent of assets, with local money accounting for just shy of 8 percent of capital, the city’s Securities and Futures Commission said in its latest industry survey in March 2011.

Small Funds

Some 54 percent of Asian hedge funds manage less than $50 million, up from 39 percent at the end of 2007, Eurekahedge data show. The risk-management policies of large institutions, such as U.S. and European pensions, insurers and endowments, restrict them to investments in larger funds.

Investors globally in the first nine months of 2012 channeled $43 billion of new capital to hedge-fund managers already overseeing at least $5 billion, an asset size rarely attained by Asia-focused companies, according to Hedge Fund Research. The entire industry took in $31 billion of fresh money in the period, indicating investors were reallocating capital from smaller managers to the largest.

About half of the job candidates that Graham Smith talks to are open to more stable positions with long-only funds or in banking now, while the ratio was much lower before 2008, the London-based recruiter for Options Group said in a telephone interview.