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Yesterday β€” 24 December 2024Main stream

The most fascinating hedge-fund hire of 2024 wasn't a star trader or C-suite executive

24 December 2024 at 06:54
A man in a suit in front of traders
As the hedge-fund talent war continues unabated, demand for the business-development professionals who recruit traders has intensified.

iStock; Rebecca Zisser/BI

  • "Business development" has become a coveted role at hedge funds amid the war to recruit top PMs.
  • The Citadel BD ace Matthew Giannini's joining Walleye was one of the most noteworthy moves of 2024.
  • Hedge funds hired dozens in BD in 2024 β€” BI tracked the names of more than 40 who joined top firms.

One of the most intriguing hedge-fund personnel moves in 2024 came late in the year. It wasn't a superstar portfolio manager or another big bank executive migrating to the buy side.

It was someone with barely any media profile at all: Matthew Giannini, a senior leader in Citadel's business-development unit whom Walleye Capital hired in October as chief operating officer of its long-short equities business.

The move from the industry's $66 billion killer whale to a much smaller fish surprised several industry insiders Business Insider spoke with at the time, underscoring the continued demand for the niche role of vetting and wooing investment professionals.

BI wrote in May about the evolution of the "business development" role, which has grown into a coveted specialty amid the boom in multimanager hedge funds. These firms, prized by investors for robust returns uncorrelated with the stock market, have added $200 billion in assets since 2019. Hiring has followed suit β€” head count since then soared by 90% at multimanagers compared with just 6% at other hedge funds β€” provoking a talent war that has been one of the industry's defining themes and challenges over the past few years.

Though total assets managed by these firms declined in 2024 for the first time in seven years (some investors pulled money amid growing costs paired with lackluster returns in 2023), "the war for talent appears to be continuing unabated," Goldman Sachs' prime-services team said in a September report on multimanager hedge funds. These roughly 50 firms added 2,400 employees over the previous year, Goldman found, a 15% increase.

Chart from Goldman Sachs prime services on multimanager headcount growth
Hiring at multimanager hedge funds has far outpaced the rest of the industry.

Goldman Sachs Prime Services

Business development was no exception, with dozens of hires by top hedge funds in 2024, according to industry sources, LinkedIn bios, and publicly reported moves.

Millennium, the largest multimanager, with $72.1 billion in assets under management and more than 6,000 employees, hired at least 10 people in business development in 2024, BI found. Balyasny, which spent hundreds of millions of dollars hiring PMs this year, added at least six new BD executives to facilitate hiring, including three managing directors β€” most recently the commodities specialist David O'Connor, who joined in November from the external search firm Maven.

Citadel has been hiring as well, adding a handful of people to one of the most revered BD units in the industry. The hedge fund last year became the most profitable of all time, something its founder and CEO, Ken Griffin, attributed in part to an "unparalleled" ability to "recruit experienced professionals to Citadel" and "tremendous success attracting gifted graduates from the premier colleges and universities." Unsurprisingly, Griffin's talent whisperers are highly sought after.

Perhaps none has more gravitas than Giannini. Several industry professionals who know him say he's tall, charismatic, intelligent, and deft at winning over PMs β€” someone who provides an actual edge in an industry desperate for it. Giannini's leaving Balyasny in 2018 to rejoin Citadel contributed to a turf war between the funds.

"Matt is, if not the best, one of the best closers I've ever met," a BD professional told BI this year.

Leaving Citadel for Walleye may raise some eyebrows, but joining Walleye offers a potentially lucrative upside for Giannini compared with a typical BD role. Business group heads at these funds usually take home a cut of their unit's profits, and while Walleye struggled in 2023, it has been executing an overhaul that's bearing fruit. The fund was up by 15.4% through November, putting it near the top of its peer group for 2024.

He also joins some familiar faces at Walleye, including Thomas DeAngelis, an ex-Citadel BD leader who's now Walleye's president, and Anil Gondi, a longtime PM who joined from Balyasny this summer and will oversee the long-short equities division with Giannini. The two overlapped at Balyasny in the 2010s.

The hiring of Giannini and dozens of others at top funds in 2024 signals that the burning demand for investment talent, and those gifted in recruiting it, isn't likely to dim anytime soon.

"One clear theme from our conversations with multimanagers was that the 'war for talent' synonymous with this segment has not seen any material de-escalation in the last year," Goldman Sachs said in its report.

BI tracked business-development professionals who joined top funds in 2024, using industry sources, LinkedIn bios, and publicly reported moves. This list isn't exhaustive, and we may update it as we learn more.

FirmName of hirePrevious firm
BalyasnyNicole AmenDRW
BalyasnyDaniel AnzaloneBlueCrest
BalyasnyHarry CaseVerition
BalyasnyDavid MatzSmith Hanley
BalyasnyDavid O'ConnorMaven Search
BalyasnyKelly SuterIMC
BlueCrestJosh BealsChi-Rho Financial
Capstone Investment AdvisorsGrace GuoGoldman Sachs
Capstone Investment AdvisorsBrian HopkinsHudson Bay
CitadelTrystan Davies-TommasonThe Omerta Group
CitadelDonata LeonovaMillennium
CitadelOlivia ReesGoldsmith & Co
CitadelHannah RosenthalGoogle
CitadelMichelle TsangTwo Sigma
EislerRuvhen ChinaireThe Omerta Group
EislerChris HarnettCitadel
Freestone GroveChristopher AldacoD.E. Shaw
Freestone GroveBrittany LynchSchonfeld
Graham CapitalDanielle GreenbergMaven Investment Partners
Hudson BayChris PadfieldCitadel
LMR PartnersMelissa BosemMillennium
MillenniumMaureen ChangPoint72
MillenniumDerek ChiangSelby Jennings
MillenniumSarka DillingerovaExecuzen
MillenniumKatie GordonCybernetic Search
MillenniumBrian KimmelCitadel
MillenniumLauren KrausGarda Capital
MillenniumTerence LeeBlackstone
MillenniumSteven RosenMorgan Stanley Investment Management
MillenniumNatalia SkrzeczkowskaDartmouth Partners
MillenniumStella XuanTenere Capital
PalomaKristin CohenWalleye
Point72Joe BeachAksia
Point72Lauren CroucherDartmouth Partners
Point72Nicole DengUBS
Qube Research & TechnologiesCaroline KadhimBrevan Howard
Taula CapitalRobert FeatherstoneCitadel
VeritionAdam DonaldsonMarble Bar Asset Management
VeritionStephanie MelendezSchonfeld
Walleye CapitalCarling DiGiacomoCitadel
Walleye CapitalMatthew GianniniCitadel
Walleye CapitalJen PascalNeuberger Berman
Walleye CapitalMaureen ReedGoldman Sachs
Read the original article on Business Insider
Before yesterdayMain stream

Quant hedge fund Seven Eight Capital is winding down a year after leaving Schonfeld

11 December 2024 at 14:35
Logo for Seven Eight Capital

Seven Eight Capital

  • Quant hedge fund Seven Eight Capital is winding down, according to people familiar with the matter.
  • The fund managed around $500 million at its peak and traded for Schonfeld for many years.
  • The funding is closing after large investors pulled capital, the people said.

Quant hedge fund Seven Eight Capital, which for many years invested money for Schonfeld Strategic Advisors, is winding down, according to people familiar with the matter.

Seven Eight Capital is closing as a hedge fund and will cut most of its staff after two large investors redeemed capital, the people said, asking to remain anonymous because the information isn't public.

The firm could continue to operate in some capacity, the people said, potentially as a separately managed account for an existing hedge fund.

Cofounder Adrian Sisser declined to comment when reached by phone.

Seven Eight, founded by Sisser and Stephen Cash, managed around $500 million in assets at its peak, sources familiar with the firm said. It had 22 employees this year, according to a regulatory filing,

For many years it managed capital for Schonfeld Strategic Advisors, trading on the multimanager hedge fund's platform for more than a decade.

The two firms cut ties last year amid a reorg and cutbacks at Schonfeld.

Read the original article on Business Insider

The films, shows, and books Wall Streeters think best illustrate their work lives

Actors Myha'la Herrold and Marisa Abela looking at screens in an office in the HBO show "Industry."
A still from "Industry," an HBO drama about young bankers at the fictional bank Pierpoint & Co in London.

Amanda Searle/HBO

  • Business Insider selected 25 young professionals, 35 and under, as its rising stars of Wall Street.
  • We asked these up-and-comers what TV show, book, or movie best represents the finance industry.
  • They shared some parallels and even pointed to works about nonfinancial subjects.

There's no shortage of colorful characters depicting Wall Street. There's the serial-killer investment banker, the corporate raider who declares that "greed is good," and the crooked, if charismatic, stockbroker, to name a few.

Two of those are fictional movie characters, and one was based on a real person, but they've all shaped the public's perception of what working on Wall Street could be like.

If you ask successful people at some of the biggest banks, asset managers, trading firms, or hedge funds whether they see their reality accurately perceived on the screen or in books, they'll tell you that working on Wall Street is a little less colorful than it's often painted to be.

"I don't know that there's a great movie or book depicting life on Wall Street," Mark Zhu, 34, a managing director at Blackstone, told Business Insider. "The day-to-day is a lot more boring than you think. It's a lot of calls and a lot of emails. There's not as much flamboyance or out-there behavior. It's almost not movie-worthy. Why would you pay money to watch somebody just sit in front of a computer doing Zooms?"

So maybe they think all that partying on HBO's show about twentysomething investment bankers, "Industry," is a little overdone, but there are still some elements the entertainment industry gets right occasionally.

We asked up-and-comers on Wall Street about the shows, movies, or books that best represent their daily lives. While no one representation was perfect, the young professionals talked about some of the parallels they saw. Some even shared some nonfinancial references that give a window into their world.

Here are the shows, movies, or books that give a flavor of what it's like to work on Wall Street.

Shows: "Industry"
A scene from the HBO show Industry. Actors David Jonsson, Ben Lloyd-Hughes, Harry Lawtey, and Sagar Radia are standing behind a set of computer screens, and Myha'la Herrold is sitting down in the forefront.
"Industry" follows junior bankers at a fictional elite institution in London.

Amanda Searle/HBO

The hit TV show "Industry" β€” full of sex, drugs, and spreadsheets β€” just wrapped up its third season.

"My friends in the last few years have nonstop bothered me about 'Industry,'" Justin Elliott, 29, a vice president of institutional rate sales at Bank of America, said.

"They see a crazy show about the industry and say, 'My God, I can't believe that happens in your world every day.' From what I've seen, there's definitely some thrills from getting a trade done that might mirror the show a bit, but it's a very exaggerated depiction of life on Wall Street."

"I don't know that any of them do a great job, but I am quite a fan of 'Industry,'" Erica Wilson, a vice president at the private credit firm Blue Owl, said. "I am still behind on the third season, but I think that show is fun."

"Succession"
Jeremy Strong, Sarah Snook, and Kieran Culkin sitting around a boardroom in HBO's show Succession.
"Succession" siblings fight it out over four seasons for the future of their father's media conglomerate.

David Russell/HBO

Though the blockbuster show "Succession" isn't specifically about the banking industry,Β Daniela Cardona, a 29-year-old investment banker at RBC Capital Markets, watched it in its entirety and found some similarities in high-stress moments.

"In the last season, when they're trying to merge the two companies, there's one scene that always makes me giggle. I don't think this is fully accurate, but I do think it's funny β€” they're in a conference room, and Kendall says, 'Just make it up!' and they're all with their laptops sitting in the middle, and the consultants are looking at him like, what do you mean, make it up?" Cardona said.

"There have been instances where it sometimes feels that way β€” where you're in a time crunch and it's 3 o'clock in the morning."

"Scrubs"
scrubs zach braff donald faison
"Scrubs" follows a group of medical students learning the ropes.

ABC/Photofest

Ben Carper, a 34-year-old managing director at Jefferies, pointed to the medical comedy sitcom "Scrubs" as a better representation than anything that features board rooms and trading floors.

He said the show had a "similar high-pressure environment where there are some opportunities for amusement and humor, but generally a pretty vigorous focus on doing a job well done."

Movies: "Margin Call"
A still from the movie Margin Call of Zachary Quinto with a pencil in his mouth.
"Margin Call" takes viewers inside a nameless financial institution.

Roadside Attractions

The 2011 drama "Margin Call" follows the 24 hours after an analyst at an investment bank discovers it has taken on more debt than it can handle β€” illustrating the early stages of the 2008 financial crisis.

"I think it picks up the cadence of working at a big bank the best," said Austin Anton, 32, a principal at Apollo Global Management.

"The Wolf of Wall Street"
the wolf of wall street paramount pictures
Leonardo DiCaprio plays Jordan Belfort in the Martin Scorsese-directed film.

Paramount Pictures

"The Wolf of Wall Street" follows the story of Jordan Belfort, who actually only worked at a Wall Street firm for a few months before the 1987 stock-market crash. He goes on to run his own brokerage, which ultimately scams several people, but the movie highlights the debauchery, opulence, and excess that ensued during his run.

"This almost sounds weird, but I'm going to say 'The Wolf of Wall Street,'" Matt Gilbert, a managing director at Thoma Bravo said. "The absurdity of that movie, to some extent, I do think, kind of incorporates some aspect of our job."

While finance is the backbone of the economy and certainly has global implications, what bankers and investors do on a day-to-day basis isn't saving lives, the 35-year-old added.

"I think the fact that you could have a comedy wrapped around the finance world is important, and it always makes me take a step back and think through, sure, I want to win every deal," he said. "Our fiduciary duty at Thoma Bravo is to produce the best returns for LPs, but this job is supposed to be fun. I'm supposed to work with great people. We're supposed to laugh together. I think if people take this job too seriously, that's when burnout and other things happen."

"The Big Short"
the big short
"The Big Short" follows several Wall Street players as they begin to piece together what was happening to the American housing market.

Paramount Pictures

"The Big Short," the movie based on the financial journalist Michael Lewis' book, chronicles how Wall Street helped fuel the US housing crisis in 2008 and the investors who profited from it.

"It's not our day-to-day, but I think it is an OK representation of what happened at the time," said Chi Chen, 34, a portfolio manager at BlackRock. " Maybe it is not all factual, but it is a good one that is representative."

"The Internship"
the internship 1 interns owen wilson vince vaughn google
Starring Owen Wilson and Vince Vaugh, "The Internship" actually shot some scenes at Google's headquarters.

20th Century Fox

Patrick Lenihan, a portfolio manager at JPMorgan Asset Management, said "The Internship," which features two old-school salesmen trying to restart their careers through an internship at Google, reminds him of the importance of having and supporting a diverse team.

"I feel like that team with Owen Wilson, Vince Vaughn, the rest of them, and how they come together at first, you see there's just a variety of different people that you're like, 'Oh, this is going to fail,'" he said. "But I think a large part of my success is going back to that teamwork, getting the right people in, and ensuring that diversity of opinions."

Books: "Market Wizards"
Cover of Market Wizards by Jack Schwager

Amazon

BlackRock's Chen, who focuses on fixed income, said that to really gain insight into the investing industry, it's best to read the "Market Wizards" book series, which features interviews with top traders.

"A lot of those investing stories for that book series are more from two, three decades ago, when market volatility was much higher. But we have seen a comeback of market volatility since 2020," she said. "So I have always enjoyed that whole series of books."

"Free Food for Millionaires"
Book cover of Free Food for Millionaires by Min Jin Lee

Amazon

Elliott, the Bank of America VP, recommends Min Jin Lee's novel "Free Food for Millionaires."

"It's about a Korean woman navigating life who ends up on Wall Street in an admin capacity. But really, it's a story about belonging and identity β€” about trying to make it in a world and industry you didn't initially know much about," he said.

"To me, it's a lot more humanistic. It gives me a bit more of a personal perspective when I think about my journey on Wall Street. When I think about the people β€” and understanding people is so much of this job β€” I go back to 'Free Food for Millionaires.'"

"The Man Who Solved the Market"
Cover of "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution"

Amazon

There's no fictional piece of media Bridgewater's Blake Cecil has found to reflect life in finance; he said shows and movies "feel quite distant" from his day-to-day.

A biography of the late hedge-fund billionaire Jim Simons, "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution," reflects how the deputy chief investment officer and his colleagues approached challenges.

"It resonated with my experience of working with people who are using algorithms to solve problems that often hadn't been asked before," Cecil said.

"The Inner Game of Tennis"
Cover of The Inner Game of Tennis

Amazon

Harrison DiGia, a vice president at General Atlantic, had another book recommendation: "The Inner Game of Tennis" by W. Timothy Gallwey.

"This book is all about the mental game and trusting your intuition and yourself. You use practice and your preparation before a competition so that when the time is right, or you have a big opportunity, you're ready, and your mental game is as strong as it can be," DiGia, 31, said.

"When I think about investing, a lot of it is setting yourself up to get that big opportunity and making sure you're prepared and can have a clear mind when that pressure situation comes. I'm a huge tennis fan, so I think about this when I'm on the tennis court, but I think about it in a professional setting as well."

"Unreasonable Hospitality"
Book cover for Unreasonable Hospitality by Will Guidara

Amazon

In the book "Unreasonable Hospitality:Β The Remarkable Power of Giving People More Than They Expect" by Will Guidara, the co-owner and general manager of Eleven Madison Park describes how he manages his business, his customer-service style, and the things he'd do at Eleven Madison Park to go above and beyond.

Craig Kolwicz, an investment banker at Moelis, said the "unreasonable hospitality" described in the book (such as having an employee run out to get a hot dog for a customer who you overheard saying they hadn't had one in New York yet) isn't dissimilar to the type of service that could differentiate an investment banker.

"It depicts a restaurant that's an extremely expensive restaurant where there's an extremely discerning clientele base. They could go to all these other really fancy, really nice three-Michelin-star restaurants in New York or in the world," the 35-year-old managing director said.

"How do you differentiate yourself? There's a lot of investment bankers out there and there's a lot of really smart clients and folks that we work with all the time β€” and how do we get them to stay with us? How do we get them to hire us on the next deal? It's some of the stuff that we do," he said. For example, he'd recently flown to Los Angeles for an 11:30 a.m. pitch meeting and flown back.

"It's like hospitality, but it's kind of an unreasonable client customer service to do something like that," Kolwicz said.

Read the original article on Business Insider

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