The war for hedge-fund talent has traders getting paid like star athletes
- Money is pouring into the hedge fund business, adding to a war for talent.
- Multi-strategy firms like Millennium, Citadel, and Balyasny are at the heart of the competition.
Every now and then, the worlds of Wall Street and sports intersect.
Maybe a bunch of NBA or NFL players end up on a trading floor for charity. Maybe a private-equity titan manager buys a team. Occasionally, Wall Streeters compete in their own tests of physical prowess.
You can now add getting paid to the list.
Bloomberg's Nishant Kumar is out with a report detailing the insane competition for hedge-fund talent, citing a headhunter who said he had helped one senior portfolio manager land a guaranteed deal worth $120 million. One executive likened the competition for talent to the bidding wars for top soccer or basketball players.
Kumar's story follows reporting from Maureen Farrell and Rob Copeland at the New York Times, who reported that hedge-fund giant Millennium had been offering guaranteed pay approaching $60 million.
"You're seeing Tom Brady-like pay packages," one hedge fund exec told the Times.
In comparison, Golden State Warriors star Steph Curry tops the NBA by player salaries, per ESPN, taking home close to $50 million for the 2022-2023 season. In the NFL, Baltimore Ravens quarterback Lamar Jackson's huge contract averages $52 million a year.
The war for talent is partly a reflection of hedge-fund performance. Big multi-strategy funds like Millennium and Citadel have excelled in recent years, hoovering up assets from investors like pension funds hoping to see strong returns. My colleague Alex Morrell wrote recently:
After years of relative quiet, macro strategies at hedge funds surged back to life in 2022 amid rising interest rates, inflation, and geopolitical convulsions. Macro focused funds including BlueCrest, Brevan Howard, and Rokos produced stellar returns as most of the hedge fund industry — especially stock pickers — faltered.
Multi-strategy giants like Citadel and Millennium also outperformed, and such firms have been competing fiercely to secure a larger slice of the macro-trading profits while the market is hot.
That has a led to a tight group of high-powered funds looking to hire from a finite talent pool, much like what has happened in the NBA, the NFL, or the Premier League.
Writing for Insider recently, hedge-fund recruiter John Pierson said that "the competition for investment talent is escalating, and finding top portfolio managers is no longer a contact sport — it's an all-out war."