Small fund companies may have an advantage over large fund companies when attracting and retaining portfolio managers because they can offer a greater equity stake, they are less bureaucratic and they give their managers greater autonomy, according to mutual fund analysts and executives.

A recent study conducted by Russell Reynolds, an executive recruiting firm in New York, examined recruiting trends in investment management and found that many successful portfolio managers are interested in joining hedge funds or smaller fund companies because of the long-term financial benefits.

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