Hedge Fund Hiring Update: July 2024
HF hiring activity remains robust, although with a massive supply shortage of top PM & Quant talent due to the ever-growing length of sit-outs/non-competes, as well as recent launches like Taula Capital and Jain Global LLC now competing for the same talent as other larger multi-strats. Squarepoint Capital also seems to be quietly becoming one of the largest hedge funds globally by AUM.
Key Trends:
- The Impact of Long Sit-Outs: Extended sit-out & non-compete periods creating significant talent shortages, intensifying PM competition between funds.
- Large-Scale Relocation to New Financial Hubs: We are seeing an acceleration in front-office talent relocating to Dubai away from hubs like London and Paris. Many candidates are now more keen than ever to move, not only due to tax incentives, however also due to increasing political uncertainty & deteriorating economic conditions in their home markets.
- HFs Interviewing More Sell-Side Traders: More hedge funds than ever are increasingly looking towards top-tier sell-side traders with strong prop numbers for risk-taking seats, due to an increasing shortage of buy-side PM talent with established track records.
- Systematic Funds Rapidly Expanding: Qube (QRT) and SquarePoint are aggressively hiring and growing at a much faster rate than pretty much all of the large multi-strats.
- Collaboration and Flexibility: Many PMs, APMs, and Analysts are increasingly valuing collaborative cultures, shared resources, and more flexible risk limits over higher payouts.
Skillsets in Demand:
- Inflation: High demand for inflation Quants, Strategists, and PMs.
- Opportunistic Credit: Some multi-strats are beginning to explore credit strategies spanning public and private markets, and some funds are even considering pure private credit-focused strategies, although there is still work to be done on figuring out how to approach risk-limits/drawdowns given the less liquid nature of these strategies.
- Specialist Macro Expertise: Strong demand in specialist areas like LatAm Rates, EM FX, Inflation, and Basis.
- Structured Products: Increasing interest in SP Quant and PM talent covering areas like ABS, MBS, and NPLs.
Conclusion: HF hiring remains more cautious than in 2023, and while funds are still actively interviewing, they remain highly selective and are hiring 1 out of every 50-100 people that they meet on average. Due to the increasingly high hurdles to landing top talent, we would not be surprised at Laz Partners if we see some mid-sized ($5bn-$10bn) multi-strats getting swallowed up while we end up in a scenario with a few mega-funds and a wide range of smaller, niche funds running anywhere from $1bn-$3bn.
