As hedge funds churn talent, their super-recruiters are more important than ever

Who are the most important people working for hedge funds now? Top portfolio managers who can deploy billions in capital with a Sharpe of more than 1.5, for sure. But also, hedge funds recruiters, many of whom were once senior markets professionals themselves. 

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It's expected that many hedge funds will need an injection of new talent this year. Portfolio managers at Tudor Capital, Eisler Capital, Armistice, Alphadyne and Millennium and elsewhere have made losses in April's volatile markets.  In many cases, these so-called "Zombie hedge fund managers" are expected to move on rather than trying to recoup losses while being paid zero bonuses. New blood will be needed. 

In hedge funds, the people searching for that new blood aren't called "recruiters," but "business development professionals." Business development professionals evolved in tandem with the rise of the multistrategy funds and are constantly on the lookout for new talent to feed the beast.  "The multistrategy funds are like rows of slot machines at casinos," observes one hedge fund recruiter, speaking on condition of anonymity. "When a machine is malfunctioning, they unplug it and replace it. It's cutthroat, but the big funds will move heaven and earth to get the right people into their seats."

Last year, some of the largest multistrategy funds - Millennium, Citadel, Point72, Balyasny, and ExodusPoint - added a combined 550 people, net. As a whole, the biggest multistrategy funds now employ 18,000 staff, of whom 8,300 are investment professionals (either portfolio managers or analysts). Many of those investment professionals have joined either from rival funds or from banks like Goldman Sachs. 

As competition grows for the rare men and women who can cope with the stress of running billions in crazy markets, there are signs that business development professionals are gaining in importance. When Matt Giannini, Citadel's head of equities business development, moved to WallEye last year, Business Insider declared his move the most interesting of 2024. Jonathan Bayliss, a senior fixed income portfolio manager at Citadel, recently stepped back from actively managing money in order to find new talent, among other things. 

The business development role can be lucrative. "Some of these people were former traders or managing directors at Goldman Sachs," observes one hedge fund recruiter. $1m pay packages are not unheard of - explains why Hilary Curran, the head of business development at Eisler, is a former head of US$ STIR trading at Deutsche Bank, and why Steve Keller, the EMEA head of business development at Millennium used to be an MD and head of Americas financing sales at UBS. "Business development is a sales role," says one practitioner. "You're recruiting the talent for the firm. You are the lifeblood of the business."

Even in a normal year, business development professionals would be busy in April. "The biz dev people are in the busiest cycle of the year," says John Pierson at New York based P2 Investments, which advises hedge funds on recruitment. "It's post bonus season, post-deferred compensation vesting periods, and pre-summer."

This year, though, the busy period may be extended as fund managers who've made losses are flushed out of seats. There's already been a flurry of moves (not for performance reasons and arranged before the recent market chaos) - including Torbjorn Haugen (Millennium to Schonfeld), Arnaud de Bevy (Walleye to Millennium), Carlos Pro (AQR to ExodusPoint), and Richard Wingfield (BlackRock to Schonfeld). 

"Look at the last few weeks," says one. "People are going to be fired, and these seats will need to be backfilled." 

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