Donald Sussman founded Paloma Partners in the 1980s. The fund is best known for seeding the quant giant D. E. Shaw.
Manny Fernandez/Getty Images
Paloma Partners told investors this past fall it would take time to meet $1.2 billion in redemptions.
It's pulling $600 million from hedge funds it's backed, including the quant firm Aquatic Capital.
The $1.7 billion hedge fund has struggled with performance, gaining just 2.5% in 2024.
The multistrategy hedge fund Paloma Partners is drumming up cash to repay its departing investors β but it's going to take some time, and not everyone is coming along for the ride.
Facing $1.2 billion in redemption requests, Paloma told its investors this past fall it would need more time to liquidate harder-to-sell assets and repay them in full. Now, more details are emerging about what Paloma is putting into the special-purpose vehicle created to house those assets.
As part of the payoff plan, Paloma is set to exit its investment in Aquatic Capital, one of the buzziest quant fund launches in recent years, said four people familiar with the matter who asked to remain anonymous to discuss private information. Paloma seeded Aquatic, which was founded by the Citadel alum Jonathan Graham in 2019. It has $360 million invested with Aquatic, which is subject to lock-up terms and can be redeemed in tranches over the next couple of years, the people said.
Paloma has also put into the special-purpose vehicle β called Dove βa portfolio of commercial-mortgage-backed securities valued at $240 million, which are set to be sold off over time, people familiar with the matter said. The portfolio was previously managed as a separate account by Cannae Portfolio Advisors, a credit fund that has managed Paloma money since 2009.
A Paloma representative declined to comment.
Paloma is one of the oldest and most venerated hedge funds. Founded by Donald Sussman in the 1980s, it is best known for seeding the quant giant D. E. Shaw, as well as its bets on LMR Partners, Squarepoint Capital, and Sona Asset Management.
While Paloma is off to a strong start this year β it's up 2.5% through mid-February, a person familiar with the performance said β the firm has struggled with performance in recent years and has overhauled its C-suite.
The fund brought in the hedge fund veteran Neil Chriss, formerly of Millennium and Hutchin Hill Capital, in 2023 to lead the firm. But he lasted less than a year. He was replaced by Ravi Singh, an alum of Credit Suisse's asset management division and Goldman Sachs, where he held leadership positions in prime brokerage, equity derivatives, and equities risk.
Paloma gained just 2.5% in 2024, which was generally a bumper year for hedge fund managers, and it has averaged 3.6% over the past three full years, according to performance figures seen by Business Insider. A composite hedge fund index returned 6.6% over the past three years, the industry research firm PivotalPath found.
Paloma's assets under management have fallen to $1.7 billion, down from about $4 billion when Chriss took the helm in 2023.
Assets in Dove to be sold over time
With redemption requests piling up, Paloma told its limited partners in November it would be able to pay them only 30% in up-front cash and the rest over time as it liquidated holdings, The Wall Street Journal reported. Ultimately, Paloma paid half the $1.2 billion balance in cash, with the remaining $600 million to be distributed as it winds down assets in Dove, the people familiar with the matter said. Paloma will not charge fees on the vehicle, which is being administered by PwC.
Systematic trading outfits, reliant on technology and data, typically require years of patience to yield results, but Aquatic has nonetheless gotten off to a slow start. It launched in 2019 with $500 million in commitments from Paloma, Bloomberg reported, and its assets later hit $1.5 billion with capital from investors including the Teacher Retirement System of Texas.
Aquatic lost 3.3% between September 2023 and September 2024, according to returns from the Teacher Retirement System of Texas, a public pension. Quant hedge funds were among the industry's best performers in 2024, gaining 14.2% on average, according to PivotalPath's equity quant index.
Aquatic did not respond to requests for comment.
Cannae, which specializes in structured products, was spun out of Paloma in 2020 and raised external capital. It continued to manage a structured-credit portfolio for Paloma through a separate account, composed primarily of commercial-mortgage-backed securities. Commercial real estate has taken a beating in recent years, and with many bonds trading below par, liquidating holdings would in many cases mean locking in losses.
While assets have fallen and Paloma has had to pull capital from external managers, the fund isn't finished allocating. Geoffrey Lauprete, the ex-chief investment officer of WorldQuant, is expected to launch his own fund later this year with backing from Paloma.
Paloma has also revamped its C-suite. Apart from Singh, it has recently hired new executives to manage finance, risk, operations, and marketing. Michael DeAddio, the president and chief operating officer of WorldQuant until 2020, joined in December, and Louis Molinari, the global head of capital introduction and hedge fund consulting at Barclays until 2024, joined as the firm's chief marketing officer this month.
Correction: February 21, 2025β An earlier version of this story misstated that Blackstone was an investor in Aquatic. Blackstone is not an Aquatic investor.
Welcome to the 6th edition of "The Rainmakers," representing the top 20 investment bankers of 2024.
These 20 bankers completed some of the year's biggest deals, based on data assembled by MergerLinks.
This year's list marks the first time a woman, Anu Aiyengar of JPMorgan, took the top spot.
If you were to describe dealmaking in 2024, you might say it's the year Wall Street got its swagger back.
US companies announced over $1.43 trillion in deals last year, the highest amount since 2021, when a dealmaking frenzy resulted in a record $2.51 trillion in US M&A activity, according to deals tracker LSEG. The uptick β combined with signs of economic growth and a more relaxed approach to regulations under the Trump administration β has led some industry leaders to suggest that the M&A freeze that started in 2022 might finally be coming to an end.
"There's a lot of pent-up energy in capital markets, particularly around the financial-sponsor community, and that will be unleashed," David Solomon, CEO of Goldman Sachs, said at a financial-industry conference in February. "I am very confident we will get back to 10-year averages" in historical dealmaking contexts, said, adding: "This year could be one of those times."
Bankers have good reason to be hopeful: There were 96 megadeals, or deals over $5 billion, announced globally last year β the most since 2021, according to LSEG. Such deals are the lifeblood of the biggest investment banks as they can generate hundreds of billions in fees for firms. Last year's M&A activity generated advisory fees of about $33.4 billion, a 7% increase from roughly $31.3 billion the year before, LSEG said.
Some of the multibillion-dollar tie-ups facilitated by the battle-hardened M&A bankers on this year's list included the nearly $36 billion sale of food manufacturer Kellanova to the snack brand Mars and the $26 billion takeover of Endeavor Energy Resources by rival Diamondback Energy.
To find out which bankers helped their firms benefit from last year's boom, Business Insider partnered with MergerLinks, a UK-based data provider that reviews M&A performance, to present the sixth annual edition of "The Rainmakers," a list of the top-20 investment bankers ranked by overall transaction volume, in the US.
This is the first year a woman β Anu Aiyengar of JPMorgan β has snagged the No. 1 spot. It's also the first time more than one woman has made the ranking, which is based on volumes of deals announced in the US.
Aiyengar, JPMorgan's global head of mergers and acquisitions, was joined by Lily Mahdavi, who was recently promoted to cohead of M&A in the Americas at Morgan Stanley.
It's Aiyengar's fourth appearance. Other repeat names include Suhail Sikhtian, who leads Goldman's natural-resources practice; Blair Effron, a co-founder of the elite-boutique investment bank Centerview; and Stephan Feldgoise, Goldman Sachs' head of M&A.
More notable, perhaps, are the unusually high number of new faces β including Mahdavi and her fellow Morgan Stanley dealmaker, Steve Munger. Also new to the list are Centerview's Todd Davison, Jefferies' Conrad Gibbins, and Xavier Loriferne of JPMorgan Chase. In total, nearly 50% of the members on this year's list β nine names β are making their inaugural debut, MergerLinks said.
The 2024 list also marks the first time a Jefferies banker has made the top 20.
MergerLinks tracks publicly announced deals and calculates deal values on a net basis, including both equity and debt components. To make the individual league table, a banker must have been the lead advisor on either side of a transaction.
Deal sizes are sourced from MergerLinks and public press releases and include the target company's net debt. The transaction values are converted from British pounds to US dollars at the average 2024 exchange rate. As a result, some deal prices announced in dollars throughout the year may not match up.
Anu Aiyengar, JPMorgan Chase
Anu Aiyengar.
Courtesy of JPMorgan Chase.
Title: Global head of M&A
Number of deals: 14
Value of deals: $83.2 billion
Aiyengar became JPMorgan's solo head of mergers and acquisitions in 2023, but has been with the bank since 2002. She is routinely cited as one of the financial-services industry's most powerful and influential female leaders. She has appeared on the list three times in the past.
Her 2024 deals included:
Advised Intel in its $11 billion joint venture with Apollo Global Management tied to semiconductor development.
Advised the private-equity firm Bain Capital in its $4.5 billion acquisition of Envestnet, a tech company focused on wealth management.
Advised Rio Tinto, a global mining organization, its $6.7 billion acquisition of the chemicals firm Arcadium Lithium.
Stephan Feldgoise, Goldman Sachs
Stephan Feldgoise.
Goldman Sachs
Title: Global head of M&A
Number of deals: 7
Value of deals: $78.2 billion
Feldgoise was named Goldman's global head of mergers and acquisitions following a management reshuffle of its investment-banking division in January. Feldgoise was previously cohead of M&A and has also led the investment bank's consumer and retail coverage group. He joined the firm in 1997 and became a partner in 2008.This is his second time on the list, with his first appearance being two years ago.
His 2024 deals included:
Advised Pactiv Evergreen, a food industry manufacturer, in its all-cash sale for $6.7 billion to the packaging firm Novolex.
Advised Ito Kogyo in its $47 billion acquisition of Seven & I Holdings, a retail firm that operates convenience stores in Japan.
Advised the data center firm AirTrunk in its roughly $15 billion sale to the private-equity firm Blackstone.
George Boutros, Qatalyst Partners
George Boutros.
Qatalyst Partners
Title: CEO
Number of deals: 7
Value of deals: $76.2 billion
Boutros is the CEO of the tech-focused investment bank Qatalyst. Previously, he was a senior banker at Credit Suisse, where he served as chairman of both the global technology and healthcare groups. Qatalyst says he has completed more than 700 transactions of various types over the years. This is his fourth year in a row on the Rainmakers list.
His 2024 deals included:
Advised R1 RCM, which provides billing and financial tech to healthcare providers, on its nearly $9 billion sale to investment firms TowerBrook and CD&R.
Advised Ansys, a design and engineering software company, on its $35 billion sale to Synopsys.
Advised Hewlett Packard Enterprise on its all-cash acquisition of IT networking provider Juniper Networks for $14 billion.
Steve Munger, Morgan Stanley
The corporate logo of financial firm Morgan Stanley is pictured on the company's world headquarters in the Manhattan borough of New York City.
REUTERS/Mike Segar
Title: Chairman of global M&A
Number of deals: 5
Value of deals: $74.2 billion
Munger has been a Morgan Stanley banker for nearly 40 years and chairman of its M&A group for two decades. This is Munger's first time on the Rainmakers list.
His 2024 deals included:
Advised Discover on its $35.3 billion all-stock sale to rival credit card giant Capital One.
Advised Truist Financial on the sale of 80% of its insurance subsidiary to an investor consortium for $12.4 billion.
Advised Marathon Oil on its $22.5 billion sale to ConocoPhillips.
Xavier Loriferne, JPMorgan Chase
Xavier Loriferne.
Courtesy of JPMorgan Chase
Title: Managing director, head of FIG M&A, co-head of media & communications M&A
Number of deals: 10
Value of deals: $70.9 billion
Loriferne joined JPMorgan in 2006. This marks Loriferne's first time on the Rainmakers list.
His 2024 deals included:
Advised on the $12 billion sale of HPS Investment Partners to the asset manager BlackRock.
Advised on the $13.4 billion merger of the real-estate investment trust Uniti with telecommunications and broadband firm Windstream.
Advised Nippon Life in its $10.6 billion acquisition of the life-insurance firm Resolution Life.
Todd Davison, Centerview
Todd Davison.
LinkedIn
Title: Partner
Number of deals: 4
Value of deals: $63.2 billion
Davison is a partner at Centerview and has been an investment banker for more than 25 years. This is his first time appearing on the list. He joined Centerview in 2013 to cohead its media practice and was previously cohead of North American media coverage at Morgan Stanley. Centerview says he's been involved in more than $300 billion worth of transactions throughout his career.
His 2024 deals included:
Advised Verizon on the $20 billion acquisition of Frontier Communications, a rival provider of TV, internet, and phone services.
Advised Charter Communications on its $17.9 billion acquisition of Liberty Broadband, a data and wireless provider.
Advised the independent directors of Endeavor, the talent agency and entertainment company, on a take-private sale to Silver Lake, which valued Endeavor at $13 billion.
Advised entertainment giant Paramount on its $8.4 billion deal to buy production company Skydance Media.
Lily Mahdavi, Morgan Stanley
The corporate logo of Morgan Stanley as pictured on the company's world headquarters in New York City.
REUTERS/Mike Segar
Title: Cohead of M&A, Americas
Number of deals: 9
Value of deals: $59.6 billion
Mahdavi, who has spent the entirety of her career focused on mergers and acquisitions, joined Morgan Stanley in 2012; she was previously at Deutsche Bank and Citi. She was promoted to co-lead the M&A business in the Americas in early 2025. This is Mahdavi's first time on the Rainmakers list.
Her 2024 deals included:
Advised Marathon Oil on its $22.5 billion sale to ConocoPhillips.
Advised insurance brokerage AssuredPartners on its $13.5 billion sale to Arthur J. Gallagher.
Advised Nippon Paint on its $4.4 billion acquisition of AOC, a chemicals supplier.
Timothy Ingrassia, Goldman Sachs
Timothy Ingrassia.
Goldman Sachs
Title: Co-chairman of global mergers and acquisitions
Number of deals: 8
Value of deals: $59.2 billion
Ingrassia was previously head of Americas M&A at Goldman, a role he held since 2004. Previously, he ran the consumer retail group. He has appeared multiple times on the Rainmakers list, including last year and the year prior.
His 2024 deals included:
Advised Kellanova, a snack food manufacturer, in its $35.9 billion sale to the snack producer Mars.
Advised Oneok, an energy company, in its $2.6 billion acquisition of Medallion Midstream.
Advised Oneok in its $4.3 billion acquisition of a majority stake in EnLink Midstream, an energy firm.
Chris Gallea, Goldman Sachs
Chris Gallea.
Goldman Sachs
Title: Vice chairman of investment banking
Number of deals: 7
Value of deals: $51.3 billion
This is Gallea's third time on the list. Gallea joined Goldman Sachs from JPMorgan in 2018 after spending nearly two decades there. He has distinguished himself as a leading banker in the industrials sector.
His 2024 deals included:
Advised Carrier, a climate and energy solutions company, in the $3 billion of its commercial and residential fire business to the private-equity firm Lone Star.
Advised Emerson, a technology and software firm, in its $3.5 billion sale of a joint venture, Copeland, to the private-equity firm Blackstone.
Advised Emerson Electric company, a software and engineering tech firm, in its $7.2 billion purchase of a large minority stake of software company Aspen Technology.
Gary Posternack, Barclays
Gary Posternack.
Barclays
Title: Chairman of global M&A
Number of deals: 6
Value of deals: $49.8 billion
The long-time global M&A leader moved into a new role as chairman last year so he could spend more time advising Barclays' top clients. Posternack joined the firm in 2008 after it bought Lehman Brothers, his previous firm. He led its natural-resources practice and its M&A takeover defense business. He became head of M&A worldwide in 2014.
His 2024 deals included:
Advised R1 RCM, which provides billing and financial tech to healthcare providers, on its nearly $9 billion sale to investment firms TowerBrook and CD&R.
Advised Frontier Communications, a provider of TV, internet, and phone services, on its $20 billion sale to Verizon.
Advised fuel pipeline and storage operator NuStar Energy on its $7.3 billion sale to gas station chain Sunoco.
Suhail Sikhtian, Goldman Sachs
Suhail Sikhtian.
Courtesy of Goldman Sachs
Title: Global head of natural resources investment banking
Number of deals: 3
Value of deals: $45.9 billion
Sikhtian became Goldman's sole head of natural-resources investment banking in 2020. He's been with the firm since 1998, when he started in the energy and power group. He has also worked with European energy companies from London. He made his first appearance on the list last year.
His 2024 deals included:
Advised Southwestern Energy on its $11.4 billion acquisition of Chesapeake Energy, the Oklahoma City-based natural gas producer.
Advised the energy company Endeavor in its $26 billion sale to Diamondback Energy.
Advised Schlumberger, an energy tech firm, in its $8 billion acquisition of ChampionX, a maker of pumping equipment.
Chris Ventresca, JPMorgan Chase
Chris Ventresca.
Courtesy of JPMorgan Chase.
Title: Global chairman of investment banking and mergers and acquisitions
Number of deals: 14
Value of deals: $45.1 billion
Ventresca, a three-decade veteran of JPMorgan, has advised on mandates spanning industrials, telecoms, consumer retail, and more. He appeared on the Rainmakers list for the first time last year.
His 2024 deals included:
Advised IBM in its $6.4 billion acquisition of software firm HashiCorp.
Advised energy firm ALLETE in its $6.2 billion sale to the Canada Pension Plan Investment Board and Global Infrastructure Partners.
Advised Vizio, a consumer electronics firm, in its $2.3 billion sale to Walmart, the US retailer.
Conrad Gibbins, Jefferies Financial Group
Conrad Gibbins.
Courtesy of Jefferies Financial Group
Title: Managing director
Number of deals: 10
Value of deals: $44.5 billion
This year marks Gibbins' first appearance on the list. The banker, who's based in Texas and concentrates on the energy sector, joined Jefferies as an analyst nearly 15 years ago. Since late 2022, he's served as Jefferies' co-head of Upstream in the Americas, and a managing director.
His 2024 deals included:
Advised Diamondback Energy, an oil and gas company based in Texas, in its $26 billion acquisition of Endeavor, an energy firm.
Advised Grayson Mill Energy, a Texas-based energy production firm, in its $5 billion sale to Devon Energy Corporation.
Advised Franklin Mountain Energy, a Colorado-based oil and gas firm, in its $3.95 billion sale to Coterra Energy.
Drago Rajkovic, JPMorgan Chase
Jamie Dimon, the CEO of JPMorgan Chase.
Kevin Dietsch/Getty Images
Title: Global chairman, mergers and acquisitions
Number of deals: 5
Value of deals: $43.6 billion
Rajkovic joined JPMorgan from Barclays in 2011 as head of technology mergers and acquisitions and has since risen to serve as a global chairman of M&A at the firm, led by CEO Jamie Dimon (shown above). At Barclays, he led tech M&A as well. It's his first time on the list.
His 2024 deals included:
Juniper Networks/Hewlett Packard Enterprises
Advised Squarespace, a custom website-development platform for businesses and entrepreneurs, in its $7.2 billion sale to the private-equity firm Permira.
Intel Apollo Joint Venture/Intel Corporation
Naveen Nataraj, Evercore
Naveen Nataraj.
Evercore
Title: Senior managing director and cohead of US investment banking
Number of deals: 5
Value of deals: $40.8 billion
Nataraj, who has been at Evercore since 2002, is a member of the firm's management committee and a top banker in its technology, media, and telecommunications business. He has advised on more than $600 billion worth of transactions, the company says. His first appearance on the list was in 2022.
His 2024 deals included:
Advised Synopsys on its $35 billion acquisition of Ansys, a design and engineering software company.
Advised private-equity firm Veritas Capital on its acquisition of NCR Voyix's digital banking business for $2.6 billion.
Advised Gen Digital, a security software company, on its $1 billion acquisition of MoneyLion, a digital banking fintech company.
Dan Ward, Evercore
Dan Ward.
Evercore
Title: Senior managing director
Number of deals: 4
Value of deals: $40.1 billion
Ward has advised on more than $450 billion worth of M&A transactions, Evercore says, and is one of the industry's top energy bankers β this is his second year in a row on the Rainmakers list. Before joining Evercore, Ward led the global natural resources investment-banking business at Deutsche Bank.
His 2024 deals included:
Advised Chesapeake Energy, the Oklahoma City-based natural gas producer, on its sale to Southwestern Energy for $11.4 billion.
Advised Enerplus, an oil and gas producer, on its roughly $4 billion merger with Chord Energy.
Advised ConocoPhillips on its $22.5 billion acquisition of Marathon Oil.
Riccardo Benedetti, Perella Weinberg Partners
Riccardo Benedetti.
PWP
Title: Partner
Number of deals: 2
Value of deals: $38.2 billion
Benedetti has been a senior banker with PWP since 2009, joining from Morgan Stanley, where he started his career in 1991. It's his first time on the list.
His 2024 deals included:
Advised Holcim, a Swiss building materials manufacturer, on the $30 billion spinoff of its North American operations.
Advised German conglomerate Bosch on its $8.1 billion acquisition of the HVAC business unit owned by Johnson Controls and Hitachi.
Adam Taetle, Lazard
Adam Taetle.
Lazard
Title: Managing director and global head of consumer, retail, and leisure
Number of deals: 2
Value of deals: $37 billion
Taetle is a first-timer on the Rainmakers list, but he's a veteran dealmaker with consumer and retail firms like Campbell's and Keurig Dr Pepper. He started his career with Goldman Sachs in the 1990s and has since held senior leadership roles at Barclays and Evercore, which he joined in 2018 to co-lead its consumer retail group. He left Evercore earlier this year, taking a top role with Lazard in June.
His 2024 deals included:
Advised Kellanova, the Pringles and Pop-Tarts snack company formerly known as Kellogg's, on its $35.9 billion sale to Mars
Advised Siete Foods, which makes tortillas, chips, and salsas, on its $1.2 billion sale to PepsiCo.
Michael J. Freudenstein, PJT Partners
Paul Taubman, founder and CEO of PJT Partners.
Victor Hugo/Patrick McMullan via Getty Images
Title: Partner
Number of deals: 2
Value of deals: $35.8 billion
This year marks Freudenstein's first time on the list. He joined PJT in 2017, having previously worked at JPMorgan in various roles. Those positions ranged from deputy head of Americas equity research to JPMorgan's head of market structure and asset management, and an investment banker focused on deals in the financial-services sector, before he left for PJT. The firm was founded by former top Morgan Stanley executive Paul Taubman, shown above.
His 2024 deals included:
Advised Discover, the financial-services firm, in its $35 billion sale to Capital One.
Advised Victory Capital, an investment manager, in its acquisition of Amundi, a firm offering a variety of financial-services products. Terms were undisclosed.
Blair Effron, Centerview Partners
Blair Effron.
Dia Dipasupil/Getty Images
Title: Co-founder and partner
Number of deals: 5
Value of deals: $34.6 billion
Effron cofounded Centerview in 2006 and built it into an influential name in investment banking, with more than 350 employees in the US and UK. Previously he was a top investment banker at UBS and has advised companies across healthcare, media, consumer and retail, and more. He also appeared on the Rainmakers list in 2019 and 2024.
His 2024 deals included:
Advised the independent directors of Endeavor, the talent agency and entertainment company, on a take-private sale to Silver Lake, which valued Endeavor at $13 billion.
Advised production company Skydance Media on its $8.4 billion sale to entertainment giant Paramount.
Advised Emerson, a technology and engineering conglomerate, on a $7.2 billion deal to acquire the remainder of Aspen Technology, a provider of software for manufacturers that Emerson bought a majority stake of in 2022.
Reed Alexander is a correspondent at Business Insider and can be reached at [email protected]. Alex Morrell is a senior correspondent and can be reached at [email protected].
What's behind an 8-figure PM hire? The truth is more complicated than a giant pile of money.
AMC
Hedge fund competition over portfolio managers has pushed compensation into the tens of millions.
But contracts are nuanced and can include profit accelerators, cost sharing, and IP ownership.
Headline figures also come with caveats, clawbacks, and even million-dollar break-up fees.
Has it ever been more expensive to hire a hedge fund portfolio manager?
Amid the war for talent among multimanager investment firms, sign-on bonuses have grabbed headlines as they've stretched into the tens of millions of dollars. Deals north of $10 million are now commonplace, according to hedge fund recruiters, and the superstars can land contracts that are many multiples larger, with bidding wars engorging deal prices.
In late January, it was Marshall Wace long-short equities PM Kevin Liu securing a $50 million bag to join Point72, Bloomberg reported. Peter Goodwin started his own equities unit at Balyasny in September, and his haul was said to be closer to $80 million. Other examples now abound.
But if the image conjured in your mind is people laying on a giant stack of bills in a storage unit Γ la "Breaking Bad," the reality is often quite different. The mechanics of an eight-figure PM deal are more complex than the headline figures may suggest, and a PM could pocket many millions less β or significantly more β depending on how the deal is structured.
Necessity is the mother of invention, and amid the competition for top PMs, funds have come up with more creative and nuanced deal structures to lure employees β richer performance incentives for limited periods, relocation to tax-friendly countries, ownership of intellectual property, or money to hire a team.
As compensation expenses soar, funds are also taking measures to protect themselves and their investors from the risks of a bad hire. Some have ramped up efforts to vet PMs, sometimes taking aggressive and legally murky measures to ensure the deals they're offering are justified, as Business Insider recently reported. Others are implementing compensation clawbacks and break-up fees into contracts to help keep a lid on rising costs.
BI spoke with recruiters, hedge fund business development leaders, and PMs about the ins and outs of PM deals at multimanager hedge funds, as well as how they've evolved in recent years as head count has doubled and assets have grown by $200 billion. Many asked for anonymity to discuss a topic that's sensitive to clients or employers.
There are common components to any contract. Sign-on bonuses are coveted and important for getting some deals done, but they're only one aspect of the mosaic and typically a small portion of the overall deal value. The profit percentage, the primary form of compensation at these funds, remains the most crucial for many people, according to John Pierson, a longtime hedge-fund recruiter and the founder of search firm P2 Investments.
"A lot of these people are alphas. They believe in their IP and their performance," Pierson added. "They want that ongoing percentage."
In general, sources said large deals are more nuanced and the guarantees smaller than is often appreciated, and that while PM deals share common features, they're not one-size-fits-all.
It's become more "rare that one deal is the same as the other," one headhunter said. "Everything is negotiable."
What goes into an 8-figure hire?
The best hedge-fund traders are often the hardest to extract. They're already highly compensated and typically in stable work situations. They usually have lengthy noncompete agreements, sometimes requiring them to sit out 12 months or more. Dislodging them and smoothing away those frictions can take patience, creativity, and, yes, large piles of cash.
While deals are increasingly tailored to the PM and contingent on a dizzying array of variables, there are common features to most contracts. Goldman Sachs highlighted several of these components in a recent report on multimanager hedge funds, based on interviews with hedge fund business development professionals:
a percentage cut of the trading profits
upfront guarantees
buyout of deferred compensation
accelerator incentives
Additionally, PMs earn a base salary that's often around $200,000, sources told BI. While very good money to most Americans, that's not worth getting out of bed for most of these professionals β a sum that won't cover their cost of living. Moreover, it is often treated as a draw or an advance on the future profits a PM will earn, according to recruiters and fund regulatory filings.
The profit payout percentage is the primary lever at these eat-what-you-kill hedge funds. At top firms, PMs commonly receive at least 20% of the profits from their trading strategy, according to Goldman. But your mileage will vary β unproven PMs may command 12% to 17%, and some superstars have gotten 30%, headhunters said. So, for example:
If a long-short equities PM is on a 20% deal and makes $100 million trading tech stocks like Nvidia and Meta, they get $20 million. If a PM makes $1 billion betting on the rebalancing of the Nasdaq or Russell indices, well, you can do the math. A portion is paid in cash and a portion is deferred and vests over time, the length varying by firm.
Then there's the upfront guaranteed bonus or sign-on bonus,the aspect that people ogle and drool over. Switching employers comes with an opportunity cost. A PM will have to sit out their noncompete, and then they have to build out their trading operation on a new platform β time they could've spent earning more money at their existing employer. The fund may provide a sign-on bonus to compensate for that lost earning potential, though how much and with what strings attached varies significantly.
"That is really the lure to get people out of their firms," one headhunter said.
The buyout or "make-whole" is related and factors into the overall guaranteed amount. Traders are often paid a portion of their annual comp in cash and a portion in deferred compensation that vests over time, and an early departure means sacrificing unvested comp from their prior shop. Additionally, they may have generated trading profits that won't be paid out if they leave mid-year.
For instance:
A talented PM may receive a $20 million upfront sign-on bonus, in part to compensate for their lost deferred comp, in part for their time sitting idle, and in part because they're in high demand. Deals covering more than two years are rare but not unprecedented, recruiters and BD professionals said, and these "guarantees" increasingly come with catches and caveats (more on that below).
An "accelerator" is connected to the profit cut, essentially supercharging that payout for a determined amount of time or up to a fixed amount of money.
Instead of just forking over more hard cash to entice a PM, the fund may offer to increase the percentage payout from 20% to 30% on the first $20 million in profits, as an example.
"Then everyone's got skin in the game," one headhunter said.
Accelerators can also be structured as a performance trigger:
The payout level increases if a threshold or milestone is reached. For example, trading profits eclipse $100 million or the Sharpe ratio β the return relative to the risk taken β exceeds 1.5.
The accelerator "has seen the greatest increase in prevalence over the last one to two years," according to Goldman's interviews with BD teams.
"Every firm wants to do accelerators before giving over hard cash," another headhunter said.
But as previously mentioned, some strategies β especially systematic trades heavily dependent on market data and technology β can take longer than others to set up and become profitable, making this provision "hollow" if the time period is too short, according to one recruiter.
"If they have their IP that helps a lot," he said.
AMC screencap
Money talks, but creativity helps
Intellectual property ownership, especially for quantitative strategies, is one of the myriad factors that also play into a hire and can significantly affect the total value, especially as "bespoke structures for each PM are increasingly normal," Goldman noted.
Millennium, the largest multimanager by assets and head count, is known for its creativity in getting deals over the line. Yes, it can back up a Brinks truck to hire a PM, but it is also known to allow PMs to leave with the IP they've built at the hedge fund β though Millennium retains a license as well and can continue to make money off of it, according to three recruiters familiar with the firm. It's not a bargaining chip offered by every firm or to every PM, but it's an important consideration to some traders.
Millennium has also opened new locations to help win over candidates, as it did with Pratik Madhvani in Dubai, industry insiders previously told BI. Relocation to a more tax-friendly location β Milan, Zurich, or Puerto Rico, for instance β has generally become a more popular inducement, three headhunters said. (Millennium declined to comment for this story).
Cost-sharing is also a key consideration. Investment teams incur a variety of expenses, such as market data, hardware, software, legal fees, and connections to trading venues and brokers. Some strategies are pricier to run than others, and these costs can erode the PM's annual profit cut, depending on how they're split.
Building out a team is also expensive. For the right PM, the fund may cover the guarantees and recruiting fees to hire a staff, which amounts to millions. Goodwin's deal at Balyasny, for instance, included money to hire a team, according to a person familiar with the matter.
Other key parameters in negotiations include risk limits and the amount of capital a PM has access to trade with β key factors affecting how much money they can generate. While a fund offering a generous 30% payout may seem like a no-brainer, it's usually less attractive than a firm offering 20% but with world-class risk and trading technology and twice as much money to trade.
Pierson said the smaller or second-tier funds can't offer the gaudy guaranteed cash a top-tier fund can, but they can compete by offering a higher percentage payout and a longer leash for drawdowns.
"What they can do to compete is guarantee a longer runway," Pierson said.
Catches and caveats
Another factor complicating compensation packages is the caveats funds now add to contracts. When people see an 8-figure PM deal, what some don't realize is that often just a portion of the reported figure is fully guaranteed, several industry sources said.
In many contracts, part of the upfront sign-on bonus is a draw, meaning the payment is earned back through future performance. They may also be subject to clawback provisions, requiring employees to repay a portion of their comp if they leave or are fired before a certain period of time.
One contract template seen by BI describes an accelerator provision β increasing the percentage payout from 20% to 30% β until a certain threshold. But it also notes that this additional comp must be repaid within 30 days if the employee leaves or is fired within two years.
"The clawbacks have become a big part of these big deals," said one of the recruiters. "It's becoming more prevalent as a way for clients to keep people out of the market to some extent."
Breakup fees are more commonly associated with multibillion-dollar mergers and acquisitions, but they now apply to portfolio manager hires as well. Recruiting is costly and time-consuming, and because of noncompete clauses, it can be months or even years from when a PM signs a contract to when they actually join. Some PMs get sweeter offers during their sit-out and renege, opting to join a different firm or to return to their old one.
Over the past two years, funds, includingΒ Millennium and Brevan Howard,Β have started including break clauses in employment contracts that impose penalties if a PM doesn't end up joining, according to recruiters and BD professionals. These clauses can work both ways β if the fund terminates the contract before a PM starts, it pays the fee β and penalties can run into the millions, with one recruiter citing one contract with a $2 million "liquidation damages" provision.
"These are becoming more normal for bigger-ticket PMs," another headhunter said.
Hiring a PM has likely never been costlier, but it has also never been more complicated.
Deals are more intricate and bespoke, with contracts running dozens of pages and hard math required to evaluate them. BD teams need to model and project each year of a PM's P&L and weigh that against the various guarantees and incentives to assess when they'll break even β and ultimately, whether a deal makes sense.
"We're doing high-stakes math behind the scenes to make sure the hire is worth it," one BD head said.
President Donald Trump signing an executive order to create a sovereign wealth fund.
Jim WATSON / AFP
President Donald Trump has tasked his Cabinet with coming up with a plan for a sovereign wealth fund.
Such funds have grown enormously and usually manage surpluses, while the US runs a huge deficit.
Still, Trump's order refers to trillions in existing national assets βa potentially telling signal.
Let's compare two countries. One is known for splashy investments in electric cars, video game makers, sports franchises, and a mercurial technology investor known for eyebrow-raising proclamations and stunts, including threatening self-immolation.
The other garners few headlines, primarily putting its money to work in sleepier stocks and bonds.
These are two of the largest sovereign wealth funds in the world: Saudi Arabia's Public Investment Fund and Norway's Norges Bank Investment Management. Both are commissioned to invest and diversify a nation's oil riches for future prosperity. But they're about as similar as shawarma and lutefisk.
How would a US sovereign wealth fund be managed?
On Monday, President Donald Trump issued an executive order tasking his Treasury and Commerce departments with coming up with a plan for the US's own sovereign wealth fund. Trump's latest edict since taking over the White House two weeks ago may seem dull compared with initiatives to ramp up deportations, pull back on foreign aid, and dismantle diversity, equity, and inclusion.
Nonetheless, it has prompted furious debate and questions. For starters: What is a sovereign wealth fund?
Most Americans are more familiar with public pension funds, which invest retirement savings for millions of teachers and other city, county, and state employees.
Sovereign wealth funds are similar, but they invest on behalf of an entire country. And whereas pensions invest money that needs to be repaid in the future β employee retirement savings β sovereign wealth funds tend to have a surplus of money stemming from a natural resource, commonly oil but also diamonds or even so-called "golden passports."
They may fund government services, direct payments to citizens, a rainy-day fund, or specific infrastructure projects. A version can be found in oil-rich Alaska, where its $80 billion sovereign wealth fund pays an annual dividend to residents, shelling out more than $900 million in 2024.
The term was only coined in 2005, and the definitions can be blurry. Estimates vary, but sovereign wealth funds have grown to be enormously influential in the two decades since β from a couple dozen funds worth roughly $1 trillion in assets to a couple hundred worth as much as $13 trillion in 2024.
At its most basic, it's a diversification play, one of the simplest yet powerful concepts in finance: having bets spread across an array of truly different investments insulates you from shocks and promotes better long-term returns.
Where the money comes from and what it's invested in depends on the country. A small fund with a few billion dollars may invest in venture capital, but that type of investment doesn't move the needle for funds with hundreds of billions, which may lean toward private equity or infrastructure projects β toll roads, energy, data centers β with 10- to 15-year time horizons.
Large funds don't need to generate enormous annual returns to have an impact. Low single-digit returns that beat inflation are often the goal, said Brian Payne, the chief strategist for private markets and alternatives at BCA Research.
"Return percentages are going to be lower, but the amount of money compounding can be enormous and quite influential," said Payne, whose clients include pensions and sovereign wealth funds. A 5% return doesn't move the needle for most individuals or Wall Street investment firms. But for a $100 billion sovereign wealth fund, that's a not insignificant $5 billion.
A key line signals why it could be realistic despite US deficits
Critics of a US sovereign wealth fund point out that the US, far from having a surplus, runs trillion-dollar deficits β the opposite of the world's largest SWFs. Absent a surplus, the money could come from debt or raising taxes or redirecting funds from elsewhere β all of which would require congressional approval.
Trump's order is light on details. It is in effect an order to Treasury Secretary Scott Bessent and the yet-to-be-confirmed commerce secretary β Trump's nominee Howard Lutnick, like Bessent, is a Wall Street titan β to come up with the details in the next 90 days. With essential components such as how it will be funded and governed and what it will invest in as yet a mystery, it's hard to judge the prudence and prospects of such an effort.
But even without a surplus, a US sovereign wealth fund could be realistic β and successful β without increasing debt or raising taxes.
James Broughel, a senior fellow at the Competitive Enterprise Institute, a nonprofit that advocates for deregulation, pointed out that the fact sheet accompanying the executive order alludes to $5.7 trillion in existing assets. The US, for instance, is the nation's largest landowner with nearly 30% of the acreage.
"A lot of the worries seem to be related to the idea that it might increase the national debt, or this might lead to more borrowing and fiscal instability," Broughel said. "The fact that they seem to be focused on existing assets that the federal government controls β I view that as a positive development."
Buying stakes in companies such as TikTok and other such investments would most likely require legislation, but changing how existing assets are managed β tapping natural resources and housing data centers on federal land, for instance β most likely wouldn't.
"The US does have considerable natural resource wealth," Broughel said, noting that the US is now the largest oil producer in the world. He added, "There is a case to be made that we should take better care of the assets we have and be better stewards for maintaining their value over time and preserving them for future generations."
Sovereign wealth funds can be as boring or interesting as the people and countries putting them to work. Trump, while polarizing, is rarely accused of being boring.
Correction: February 5, 2025 β An earlier version of this story misstated Howard Lutnick's position. He's Donald Trump's nominee for commerce secretary but has not been confirmed in the role at the time of publication.
The biggest hedge funds are battling it out to attract and retain top talent and outperform peers.
Business Insider has talked to elite hedge funds to get a peek into their recruiting processes.
From internships to high-paying tech jobs, here's what we know about their hiring practices.
The war for hedge fund talent cuts across all levels and positions, with firms like Citadel, Point72, and Millennium constantly competing to gain an edge in a cutthroat industry.
These behemoth funds are now putting serious time and resources into recruiting for internship and training programs to create a steady employee pipeline. Steve Cohen's Point72 and Ken Griffin's Citadel recently opened applications for their 2026 summer internships to undergrad students.
Eye-popping pay, challenging work environments, and the promise of working with some of the best investors in the industry can make them an attractive employment option.
Business Insider has talked to some of the biggest hedge-fund managers about how they attract talent, as well as their advice to prospective hires.
Here's everything we know about getting a job at a large hedge fund.
Internships
Years ago, the opaque and secretive world of hedge funds might not have been an obvious career choice for most college graduates. However, these investing behemoths are now investing in getting young, diverse wunderkinder, especially mathletes, familiar with their brands as soon as high school.
Internships are another talent pipeline for some of the biggest multi-strategy hedge funds, which employ armies of traders and engineers. Programs can be uber-competitive and harder to get into than many top Ivy League schools.
Bhavya Kethireddipalli during her Citadel summer internship in 2022.
Citadel
Citadel's summer internship program, for example, has become increasingly competitive. Last year, the hedge fund accepted around 300 interns to spend 11 weeks at Griffin's hedge fund or his market maker, working with stock-pickers, quants, engineers, and more. The firm told BI that there were more than 85,000 applicants for the programs, with an acceptance rate of roughly 0.5%.
Citadel's associate program is a separate internship that puts rising college seniors on track to land a full-time investing role at the $66 billion fund.
In the past, hedge funds acquired investment talent from investment banks. Increasingly, however, the industry's top players are recruiting college students through intensive training programs that can lead to jobs straight out of college.
Creating a pipeline of portfolio managers has been an increasingly popular strategy for hedge funds locked in an increasingly expensive battle for top talent.
Hedge funds have long been competing with the finance industry and top tech companies for top technologists. Engineers and algorithm developers are key to helping researchers, data scientists, and traders develop cutting-edge investment strategies and platforms. Quant shop D.E. Shaw also has a unique approach to finding talent.
In a famous scene from "Liar's Poker," Michael Lewis' best-selling memoir about 1980s trading culture, a Salomon Brothers employee defecting for a big payday at a rival bank tells the brass begging him to stay, "You want loyalty, hire a cocker spaniel."
Decades later, the sentiment resonates more than ever at hedge funds. They've long been home to some of Wall Street's fattest paydays, but in recent years a gravitational shift toward one distinct breed of fund has changed the game, minting multimillionaire traders on an industrial scale.
Over the past half-decade, multimanagers like Millennium, Citadel, and Point72 became the darlings of the hedge-fund industry. Some $200 billion gushed into these funds and their competitors starting in 2019; assets stood at $366 billion in 2024. Head count at multimanagers βknown for spreading their bets across an array of individual teams and strategies β more than doubled, while staffing stagnated in the rest of the hedge-fund space.
Some accepted more money than they could reasonably invest, and hiring went in overdrive to keep pace. The hunger for portfolio managers was voracious but not always discriminating.
Multimanager funds now regularly fork over eight-figure deals to PMs, with some coveted stars receiving packages north of $50 million. But firms often must take it on faith that PMs claiming tens or hundreds of millions in profits at their former employers are being forthright.
The dirty secret, according to conversations with nearlytwo dozen portfolio managers, recruiters, hedge fund execs, and business-development professionals, is that many of them aren't. When it comes to performance, traders regularly prevaricate and exaggerate; it's just a matter of degree and audacity.
With "F-you money" hanging in the balance, there's even greater incentive to embellish β and more on the line for investors.
"A large percentage of PMs fluff their numbers," a recruiting exec at one large fund told Business Insider.
While hedge funds have always tried to vet candidates, both firms and employees face a dilemma: Trader P&L, industry shorthand for "profit and loss," can't be gleaned from an AI assistant or bought from a data vendor β it's confidential, proprietary information belonging to a competitor.
Dishonesty on this opaque corner of Wall Street isn't new, but the pace of hiring and deal size is.This war for talent has driven up costs for investors, who have started to push back.
Hedge funds have responded to this pressure in varying ways, including some that are bolstering efforts to verify performance. But achieving greater levels of certainty often requires a willingness to cross ethical and legal boundaries, as well as some skill in spycraft β cultivating sources and cajoling them to provide sensitive information, sometimes via clandestine meetings or anonymously mailed documents.
While industry professionals BI talked to described practices and firsthand experiences with companies, most declined to single out firms, and they asked to remain anonymous to discuss a legally sensitive topic and protect business relationships. Their identities are known to BI.
Some believe tighter vetting is uncomfortable but necessary to protect investors' capital, but some find the descent into riskier legal territory troubling.
"You're just putting people in bad positions," a PM with experience at multimanager funds said. "It's a horrible way to start a business relationship."
Last summer, a senior headhunter who places PMs at multimanagers saw a change emerging on the hiring front lines. Before finalizing multimillion-dollar deals to hire candidates, funds were making a bold request: direct, proprietary evidence of the PM's trading performance. Some, for example, asked PMs to jump on FaceTime or Zoom while at home and pan the camera over to their computer screen to show their P&L in their company's internal system. Others were meeting candidates at coffee shops or going to their homes.
While some PMs obliged, eager for a hefty payday, others were spooked. Violating their nondisclosure agreements made them deeply uneasy, and the courtship stalled.
"Any PM showcasing P&L is violating the contract they signed at their current employer," the headhunter said. "But the only way to go and get another seat is showcasing or conveying what you've done at your firm.
This verification step typically happens toward the end of a monthslong courtship, and several headhunters BI talked to said they'd had deals fall apart in the past year because the information a fund requested made the candidate too uncomfortable.
"It's happening more and more," the second headhunter said. "Some guys balk at it, and that's where the deal falls apart."
Hard data on the extent of such practices, much like trader performance figures, isn't available. There are more than 50 multimanager funds, some with less than $2 billion in assets and others with more than $60 billion, and management styles and hiring practices vary widely. But the industry professionals BI talked to said that generally firms were intensifying their vetting rigor and that requests for sensitive and legally protected information were becoming more common.
Perhaps the most popular and ubiquitous way of corroborating a trader's performance is by obtaining the candidate's pay history through W-2 tax records and deferred-compensation statements.
Because hedge fund payouts are formulaic β most multimanagers pay a standard percentage of a trader's profits that's typically upward of 20% β a PM's compensation is a direct indicator of their past performance.
One multimanager exec said he asked for W-2s and screenshots of P&L, describing these requests as "the same thing everyone else asks for." But many states, including the hedge fund hot spots New York, California, and Connecticut, have barred employers from asking about salary history.
"I don't think reputable firms would ask you to do that."
A PM with experience at multimanager funds said hedge fund business-development reps had been pushing for PMs to share screenshots of not just annual returns but monthly figures. Another PM said his current firm asked for such granular detail in its vetting, including subsector exposure levels and returns, that he had to compile the stats on his own because his firm didn't track them.
A third told BI he'd shown recruiters P&L from his firm's internal systems during in-person meetings. He said due diligence ramped up as the guaranteed pay packages got larger.
"To show something in person is always better," he said.
Still, other hedge fund professionals said that they hadn't experienced such requests and that they strongly objected to the practice.
"It violates all the confidentiality agreements," another PM who's worked at multiple funds said. "I don't think reputable firms would ask you to do that."
Hedge fund portfolio managers are more like the cocker spaniel, a gundog once known as much for its hunting prowess as for its loyalty, than that Salomon Brothers trader knew. Expensive, tireless, and well trained, they're experts at sniffing out treasure that others can't see β a skill applicable to trading but also to other vocations, including job hunting.
As the market for hedge fund PMs' talents exploded and sign-on packages stretched into the tens of millions of dollars, scrutiny didn't always keep pace. And some PMs smelled an opportunity.
"It can be gamed, and it's definitely been gamed," a PM who has worked at large multimanager funds said.
Jeff Hutchens/Getty Images
One ex-BD source at a large fund recalled a candidate who filed paperwork on official letterhead that was later revealed to be fraudulent β the candidate had combined separate documents and altered information.
"Guys lie all the time. All the time," another headhunter said, adding that the funds had "all been burned 100 times."
The top performers are typically worth the cost, and the top platforms have generally shown that they know which to bet on, said John Delano, the head of research and analytics for the asset manager Commonfund's outsourced-CIO team. That doesn't eliminate the sticker shock for investors, though.
"You kind of wince a little bit when you see the big free-agent numbers" for PM hires, Delano said.
Whether it's a great hire or a bust, investors are increasingly picking up the tab because of the proliferation of pass-through fees, in which allocators cover a fund's operating costs β including ballooning PM compensation.
A September report from Goldman Sachs said more than 80% of the 53 multimanager hedge funds tracked by its prime-services team had pass-through fees, up from 63% in 2022.
Some allocators have started pushing back on expenses. They've become "more hawkish on making sure higher fees are justified," said Jon Caplis, the founder of the hedge fund research firm PivotalPath. "And they are trying to get as much transparency as possible."
The Teacher Retirement System of Texas, one of the country's largest pension funds and hedge fund investors, published an open letter in May arguing for hedge funds to implement performance hurdles that ensure they're beating the cash rate. Dozens of investors signed the letter.
"Keeping a close eye on external-manager costs and hiring practices is not new," Lulu Llano, a director at Texas Teachers focused on hedge fund investments, told BI. "It does appear to be getting more scrutiny given the recent capital flows into the space."
Llano said the pension giant had observed some multimanagers taking new measures to protect their businesses amid the hiring frenzy, including lengthening sit-out periods for departing PMs and in some cases clawing back compensation.
Other funds are opting to take a harder line before a PM ever enters the front door.
Allocators don't typically get in the weeds on individual PM hires, but they do meet with the BD teams and assess a fund's procedures and systems for recruitment and retention.
BD teams have a limited set of tools to vet a candidate. One common method is investigating and triangulating performance claims via industry sources β bankers or other hedge fund services providers, for instance.
For example, one multimanager PM recalled that when he moved to a large fund a few years ago, the recruiter already had accurate knowledge of his performance. He wasn't asked for additional verification.
But these inquiries have limitations, including the breadth and quality of a BD team's contacts across trading strategies.
Some firms delicately dance around the law to obtain tax records with salary history that corroborate past performance.
Funds can use tax documents, but only if a candidate volunteers them β which can require some ingenuity that "does not go in hiring manuals," an ex-BD source said. This person said they wouldn't explicitly ask for such information, especially in writing, but gently prodded candidates, wondering aloud whether there might be anything in their possession that could back up their claims and make the firm more comfortable closing the deal.
"You can lead the horse to water, but you can't be like, 'Give me your W-2,'" this person said. "People pick it up pretty quick and say, 'Oh, I can show you my tax filings.'"
dtimiraos/Getty Images
Another BD rep said many candidates would bring up the W-2 on their own.
Other firms ignore the law entirely, directly asking for tax documents from candidates, according to PMs, headhunters, and hedge fund execs said other firms would directly ask for tax documents from candidates.
But some firms want additional certainty via actual P&L figures, especially for current-year performance claims, which can translate to millions in a PM's overall sign-on package.
The ex-BD source said some "detective work is required to protect investors." This person recalled a colleague visiting the home of a candidate to view performance evidence. This person has also received documents via FedEx. "It doesn't have a return address, but it has the screenshot I wanted," he said.
"It's really a slippery slope," he added. "You need information to verify it, but there's legal and ethical ramifications."
Hedge funds regularly go to war over talent defections and breaches of their proprietary information. The legal risk for any individual PM may be small but isn't entirely theoretical, and firms and their employees have become entangled in litigation over confidential-information breaches during recruitment.
Citadel, the $64 billion multimanager fund run by Ken Griffin, has vocally opposed recruiting practices that involve sharing confidential information. It sent out an email last fall warning external headhunting firms not to spread the firm's proprietary information or to share competitors' info with Citadel employees.
Citadel is not alone in its efforts to color inside the lines. One BD rep at another large multimanager fund said that asking to see a documented P&L track record was tantamount to asking for IP β "you're asking them to break the law." In quantitative trading, where firms are especially protective of IP and trader performance is more dependent on a larger system, overt attempts to solicit confidential P&L information aren't common, several sources in that world said.
One of the headhunters who noticed more aggressive vetting this summer said his clients were mixed, with some funds nonchalant about asking for proprietary information and others firmly opposed.
Whether stiffer vetting processes become prevalent has ramifications for the hiring market, and firms that accept less certainty risk ceding an advantage to their competitors. To some extent, he said, PMs expecting large payouts will have to "get comfortable with proving P&Ls."
"Otherwise," he said, "deals aren't getting done."
This headhunter was recently bemoaning yet another deal, months in the making, that looked set to fall apart. Due diligence revealed the candidate had presented their track record in a misleadingly rosy light.
"It's a colossal waste of everyone's time," he said.
Alex Morrell is a correspondent at Business Insider. He can be reached via email at [email protected], or SMS/the encrypted apps Signal and WhatsApp at (262) 573-1023.
Wall Street's biggest banks are gearing up to communicate 2024 bonus compensation to staff.
Bonuses are expected to be as much as 35% higher as demand for corporate dealmaking grows.
Here are the dates banks like JPMorgan and Goldman are expected to tell employees what they made.
Wall Street bonus season is kicking into high gear this week as the biggest banks get ready to tell employees how much they earned in discretionary income.
Morgan Stanley, known for leading social media company Reddit's IPO in March, is expected to start telling employees how much they earned in 2024 bonuses as soon as this week, according to three people with knowledge of the bank's plans. A spokeswoman for Morgan Stanley declined to comment.
Other large banks are scheduled to communicate bonus numbers to staff later this month, including Goldman Sachs as soon as next week and JPMorgan Chase the week after that, people with knowledge of the banks' plans told BI.
From junior analysts to senior bankers, year-end bonuses tend to indicate not only Wall Street workers' own performance in a given year, but also their value to the company. It's common for bankers who feel snubbed with a lowball number to leave for other jobs after their check clears.
Bonuses have been down in recent years after hittingΒ new highsΒ in 2021 due toΒ lackluster demandΒ for mergers and capital raising.
This year, investment bankers and traders are expecting bonuses to tick higher (up as much as 35%, according to comp consultants Johnson Associates) thanks to a bounce in deal flow that's predicted to ramp up this year.
Worldwide M&A was up 11% in 2024 to over $3 billion, according to data from the London Stock Exchange Group. The five biggest banks β JPMorgan, Goldman Sachs, Bank of America, Morgan Stanley, and Citi β dominated the league tables last year, led by Goldman Sachs with 30% global market share, followed by Morgan Stanley with 25%, and JPMorgan with 19%. Bank trading revenue also skyrocketed, propelled by rising interest rates and stock volatility.
BI spoke to bank insiders and headhunters to find out when employees of the largest banks are expecting to learn their "number." They said bonus information tends to be closely guarded and that communication dates are subject to change. See when the biggest banks are scheduled to tell staff how much they earned in 2024 bonus money, in chronological order:
Morgan Stanley
Multiple people with knowledge of Morgan Stanley's plans said the investment bank, which ranked No. 2 in M&A last year, will start to share bonus numbers with staff onΒ January 8, making it the first major bank to do so.
Goldman Sachs
Goldman is expected to begin revealing comp on January 15, the same day it reports its 2024 and fourth-quarter earnings, a process that tends to stretch out for several days, a person with knowledge of the announcements told BI.
JPMorgan
The biggest US bank by assets plans to start communicating bonus compensation to employees on January 21, a person familiar with the bank's plans told BI. Employees based in the US will be paid the following week.
Bank of America
Bank of America is aiming to begin communicating bonuses on January 27, a person with knowledge of the announcements told BI. A BofA spokesman declined to comment.
Citi
Bonuses at Citi will be shared in the second half of January, according to a person familiar with the plans, though it isn't clear which day. The bank has been undergoing a massive restructuring since 2021 when CEO Jane Fraser took the reigns.
Each year, Business Insider highlights Wall Street's rising stars.
These are up-and-comers in investment banking, trading, and investing.
All are 35 or younger. Check out our lists over the years.
For the past eight years, Business Insider's finance reporters have tapped their contacts to put together a list of who to watch on Wall Street.
We've received recommendations from bosses, colleagues, recruiters, and financial industry experts to create our annual feature. To be eligible, nominees must be based in the US, 35 or younger, and stand out among their peers. The editors make the final decisions.
Business Insider asked these rising stars from leading firms like Goldman, Blackstone, and Citadel to reflect on their successes, challenges, and best career advice.
Our most recent set of young professionals reflect the future of finance. A number of them are shaping the trajectory of clean energy and artificial intelligence by financing the infrastructure that will underpin it. Some have seen their focus go from niche to hot asset. Others are influencing how Wall Street interacts with Main Street, using their skills and savvy to create new products and services for ordinary investors or giving employees at portfolio companies ownership stakes.
The rising stars also shared how they unwind and stay grounded in order to stay mentally sharp.
2023's cohort included traders setting new playbooks for deals and trades and an investor building out burgeoning private markets businesses within the world's largest bank. These influencers also financed some of the biggest deals of the past few years and provided an edge to top investors with complex and innovative products.
They shared the lessons learned from their biggest career mistakes and how their Wall Street wardrobe had evolved from their COVID work-from-home days.
2022
Fidelity; General Atlantic; Jefferies Group; Goldman Sachs; Rachel Mendelson/Insider
As Wall Street navigated volatile markets, fewer deals, and plummeting company valuations, we found the players rising up despite the challenges.
One invested in space ventures, and another executed multibillion-dollar trades. Some up-and-comers pushed their teams to the top of industry rankings.
From books on the science of sleep to fantasy football strategy podcasts, here's what these bright leaders were reading and listening to. And here are some of their lessons and advice.
Here are the previous editions of our Wall Street rising stars list:
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.
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.
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.
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 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"
"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"
"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" 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"
"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"
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" 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"
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"
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"
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"
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"
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"
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.
