With New York’s top investment banks either converting into commercial banks or bankrupt, the city is poised to lose revenue and talent, industry analysts said.

The prediction is that many of the highest-paid traders, analysts, and portfolio managers, frustrated with lower earnings potential at commercial banks — the banks are permitted to use only about one-third the leverage of investment banks and so often post lower returns — will leave to start their own hedge funds and investment vehicles, where possibilities for profit are greater. And unlike the Wall Street banks, Manhattan’s borders will not bind these new companies.

“You can start up a hedge fund anywhere you have an Internet connection — you don’t even need a phone — as long as you have capital and a good reputation,” the chief market strategist at research firm Fusion IQ, Barry Ritholtz, said. “Given the collapse of Wall Street, it is hard to know how many people will decide they don’t really need to be here.”

That is not to say that hedge funds are not facing their own difficulties. One index of hedge fund performance was down 5.8% for the year going into September, and the funds are now contending with “redemption week,” the period when investors say whether they want to redeem their money at year’s end. For the bulk of the industry, the deadline for requesting redemptions is tomorrow, and its outcome could have a severe impact on the industry’s performance going forward.

Meanwhile, Wall Street is contending with a new landscape, with all five major investment banks bankrupt, acquired, or converted into commercial banks. Last week, Goldman Sachs Group Inc. and Morgan Stanley announced they would become commercial bank holding companies, following on the heels of Lehman Brothers’ bankruptcy and Bank of America Corp.’s acquisition of Merrill Lynch & Co. Earlier this year, JPMorgan Chase acquired investment bank Bear Stearns.

As commercial banks, Goldman Sachs and Morgan Stanley will join JPMorgan Chase, Citigroup, and others in submitting to greater regulation by the Federal Reserve. In return, the banks will gain access to the Fed’s borrowing facilities. As part of this additional Fed oversight, the banks will be limited to borrowing about $10 for every $1 in equity they hold, compared with $33 for every $1 Bear Stearns held, for example.

By using more leverage, the investment banks were able to increase the size of the bets they were making with their portfolios, allowing for far greater returns. Their compensation for employees also reflected this, with some top earners taking home tens of millions of dollars in bonuses. As commercial banks, their ability to borrow as much, and generate such high returns and salaries, will be more limited. In light of this diminished earning potential, some banking employees may choose to launch their own platforms, where they can continue investing using greater leverage.

“Certain top portfolio managers, traders, and analysts will feel motivation to leave and start their own enterprise,” a lawyer at Sadis & Goldberg who specializes in hedge funds, Ron Geffner, said, adding he is advising several portfolio managers “who are using their own capital to incubate a track record, so after the market stabilizes they can go out on their own.”

He added, “These people are driven by two things: economic reward, but also the knowledge that the major banks no longer offer job stability.”

The drive to locate a new fund outside of New York is in part because of lower taxes available elsewhere, like Greenwich, Conn., and the Cayman Islands, hedge fund executives said. Also, “the regulatory landscape may change a fair amount, and if the regulation becomes onerous, perhaps you will see hedge funds begin setting up shop in other domiciles,” the general partner at hedge fund Aurelian Partners, Brian Horey, said.

But there are several factors that could put a crimp in plans to launch new investment funds. Perhaps the largest stumbling block is the lack of capital. “This is a really tough environment to raise capital, and investors are focusing more and more on someone’s track record,” Mr. Ritholtz said. “Especially if you are looking to set up your first fund, even if you’ve had a strong record at an investment bank, it may not be enough now.”

Many hedge funds and other firms may also decide to remain in New York because of the availability here of talent and infrastructure. “While some will probably look to places like Greenwich because the local tax treatment is so much more favorable than New York, others may decide the benefit of a broader talent pool and the convenience is a bitter fit,” Mr. Horey said.

And as hedge funds face turmoil following redemption week, it may become even tougher. If these funds are forced to unwind their positions so they can return some investments to clients, it could put pressure on the market and cause further difficulties for the financial industry.

Despite these challenges, employees who do disperse and create their own funds elsewhere will accelerate the pain with which Manhattan was already bracing. Investment banks have typically been some of the biggest employers in the city, as well as the biggest commercial tenants and revenue generators. Earlier this month, Governor Paterson said as many as 30,000 New York jobs could be lost as a result of the Wall Street collapse, while Mayor Bloomberg has said it could have a drastic impact on revenue.

“It’s generally believed that one Wall Street job helps create two or three other jobs,” Mayor Bloomberg said in a press conference earlier this month. “This multiplier effect will have a serious impact not only on the financial-sector employees who lose jobs, but also on many New York families who are indirectly affected by those job losses.”