What is happening in the current hedge fund market?
High staff churn is not uncommon at multi-strategy hedge funds – reasons can include drawdown limits, risk allocations, culture/ collaboration. However, some funds are losing portfolio managers at a much higher rate than others. Eisler Capital (founded by ex-Goldman Sachs Partner and Macro Trader Ed Eisler, with another ex-Goldman Sachs partner Sam Wisnia) has seen at least 12 people leave in the past 6 months. This includes Amir Fais, the ex-head of EMEA EM trading at Goldman, who departed after three months and Sylvain Lebre, Deutsche Bank’s former head of credit derivatives trading who left in April after 16 months.
Point72 appear to be having a gentler approach to its personnel. Niall Hession, head of trading for Europe at Point72 was recently asked why he’d worked for the fund for five years. He put it down to the culture. “Turnover is low here – many of our PMs started here as analysts.”
What does that mean for the industry?
The war for talent comes down to the fact there is finite pool of highly successful hedge fund portfolio managers. As leading multi-strategy funds fight for the same people, the compensation is extremely lucrative, however, the role of a portfolio manager is undeniably demanding. Will England, the CEO and Co-CIO of Walleye Capital, the Minnesota-based fund that’s been transforming itself into a multi-strat, said it’s not easy to find portfolio managers simply because so few people have the psychological stamina to do it. Becoming a top performing portfolio manager “takes a certain psychological profile and that requires training, and I just don’t think many humans are wired that way,”
Advice to clients
Don’t wait around, or let processes drag – the market moves fast. Offer competitive compensation packages and performance-based bonuses & sign-on bonuses to reward PM contributions. Consider long-term incentives such as equity ownership or profit-sharing arrangements to align the interests of senior staff with the firm’s success. Continuously monitor the external job market to understand industry trends and ensure your compensation and benefits packages remain competitive. Exit Interviews may also be considered with departing senior staff to gather feedback and insights on areas for improvement.
If you are concerned about how the current market may affect your position, or to discuss how we can support your hiring processes in the current market, please get in touch with Senior Consultant in Hedge Fund Front-Office, Orla Louden, at orla.louden@coopman.uk
