"If it weren't for 20 key people, Microsoft wouldn't be the company it is today" says Bill Gates.

He confirms what we have long known: talent mirrors the familiar bell-shaped curve in that the chosen few at the positive extreme make all the difference.

Hence, it is time to turn the spotlight on the "talent famine" among investment professionals worldwide - concerning equity, fixed income and analysts. Two in three jumped ship in the UK in 2005. In 2006, the rate was nearly as high, according to the latest annual survey by Investment Solutions, part of the Alexander Forbes Group.

As for the causes, poaching accounted for 60 per cent of the turnover, and corporate restructuring a further 20 per cent. Headhunters' explanations are self-serving: in the brave new world of absolute returns, clients want alpha performance; hence, fix the skills and the numbers will follow. If only reality were that simple.

"In part, these figures reflect a catch-up after the bear market," says Alan Brown, head of investment at Schroder Investment Management. "But they also reflect the fact that fund managers are now being forced to address issues around underperformance. A turnover rate of around 10 per cent is about right. It helps to revitalise your gene pool."

At a time when market-driven beta remains the predominant source of returns, the implied scale of poaching conjures up the image of a drove of refugees fleeing reality. And who can blame them if their employers persist in deluding themselves that they are attracting stars in the war for talent?

The delusion is nothing more than the triumph of hope over experience. It rests on the view that, if you fill your front office with people with a generalised propensity to do well, hey presto, they will outperform. The fact that their track-record suggests otherwise is neither here nor there: this time, it will be different.

What matters, the argument runs, is where they have been and who they are, not what they have achieved.

Talent is about far more than that. It is the ability to win consistently, using rational methods or intuition or both. It relies on self-motivated creativity to solve challenges, as implied by Mr Gates.

In fund management, the difference between skill and luck is consistency of good performance, even though some sceptics claim it is possible to have a long lucky streak thanks to the laws of randomness. Investment professionals accept randomness in their failure, not their success. It is thus hard to accept that even a significant minority of today's job hoppers are necessarily talented individuals. Some are, most are not. Of course, more can be nurtured in that role.

Karl Dasher, global chief investment officer at SEI, says: "Developing and retaining talented professionals requires an infrastructure built around empowerment and decision leverage. The best professionals want a system that maximises their creative and tactical talents with like-minded professionals who share the same goals and ideals. Do that welland superior performance and business economics will follow."

Without a nurturing culture, employers are unwittingly setting up their new hires to fail. After all, talent has always been scarce in the upper decile. Only a tiny minority has been able to outperform year after year. As the market is becoming more transparent between alpha and beta, the difference between success and failure is now all too obvious, according to the latest study sponsored by T. Rowe Price and Citigroup*.

Yet, fund managers feel obliged to parade their new hires as front-line troops in pursuit of absolute returns. They have to show clients that they are re-engineering their businesses and importing fresh blood to enhance the credibility of their proposition in the face of incursions by hedge funds. But sooner or later, high staff-turnover rates will show up to be what they are: an expensive window-dressing exercise, with end clients picking up the tab.

Inherent in this industry is a mentality that thrives on new lingo, fear and greed. The jobs merry-go-round shows either an honest belief that things will be better this time or it is yet more chasing after the next rainbow. Either way, it distorts the image of the industry and the thousands of good people who work in it.