Compensation levels for hedge funds and investment management firms "are going to come down very significantly versus other parts of the economy," investor Barton Biggs told CNBC Friday.
"I believe that the financial services industry, including hedge funds and investment management firms, are in the early stages of a secular bear market," said the managing director of the multibillion-dollar hedge fund Traxis Partners.
In a recent report, Biggs advised his grandchildren to be engineers if they want to be rich, rather than work on Wall Street, because compensation is bound to come down from their highs.
The longtime bull sees the U.S. stock market rally continuing.
"I think this rally is still going to be about repositioning," he said, adding that many hedge funds were net shortgoing into this week.
"There's a huge amount of money that’s been trapped out of this market," he said. "We’re coming into the end of the year. They’ve had a mediocre year, everybody is down...and desperately can’t afford to miss something here. Every time we get a dip, we’ll get a significant amount of buying coming in and it’s going to work its way higher."
Biggs said he won't be investing in Europe, because it's in for a decade of slow growth. "There are other places in the world that are more attractive," he said, citing Asia and other emerging markets, as well as the U.S.