If you’re tired from the hustle and bustle of the day and want a little rest, but you’re hesitant because you’re not getting paid and you might not have a seat when you come back, you’re in the wrong job. You will be working in You must be a very successful portfolio manager at a top multi-strategy hedge fund.
David Lipner also followed this path. After graduating from Lafayette University and graduating from Columbia Business School, Lipner took a job at an asset management firm, then Merrill Lynch (one year before the financial crisis), and then CLSA, an Asian capital markets group. It’s not clear if the CLSA was a response to the post-financial crisis ML turmoil, but Lipner used it to accidentally move to hedge fund Millennium, where he’s remained ever since.
That was 12 years ago and Lipner, now about 40, recently decided it was time for a change. Bloomberg reported that he had submitted his resignation to join a rival firm. Millennium didn’t want him to go. It gave him a full year of paid leave and an “incentive” to come back.
Bankers may expect another miserable bonus this year, but Lipner’s experience is a striking reminder that compensation is still skyrocketing in the world of multi-strategy hedge funds. Top portfolio managers are poached with packages of $10 million, $15 million, $50 million and even $120 million, according to headhunters. It’s like Wall Street in 2006. At Top Fund, employees and the platform currently share 55% of trading profits.
While all this is happening, headcounts at multi-strategic companies are growing. Bloomberg, citing Goldman Sachs figures, estimates the number of investment professionals hired by Multistrat (Citadel, Millennium, Verison, Schoenfeld, Baryasny, Point72, Eisler, Exoduspoint) between 2015 and 2022. Single-manager hedge funds kept their numbers roughly steady, while they increased their numbers by 125%. But the world is still small. According to Goldman, the number of investment professionals across multi-strategy hedge funds last year was just 7,200. According to our own research, these are divided into:
According to Bloomberg, top portfolio managers are increasingly able to determine terms as multi-strategy hedge funds search around the world for people who can effectively manage their assets. And it’s not just about salary. Lifestyle also plays a role, as Lipner shows. So does access to technology, data and market insights. One CIO said a multi-strategy fund is essentially an HR platform that needs to keep employees happy. If not, there are plenty of bids elsewhere.
Apart from this, Goldman Sachs traders continue to leave for the top hedge funds and yesterday’s presentation. Goldman Sachs President John Waldron reminded me why. Waldron said Goldman’s sales and trading revenues were down 25% year-on-year, and the company was “preparing for a tougher environment” for a recession. A “very difficult” economic background. Morgan Stanley is doing something similar.
in the meantime…
Hedge fund Coatue uses AI to Scrutinize sales-side surveys, revenue records, and pitch materials to extract key takeaways and summarize them in clear, concise descriptions. VC firms use this to: Evaluate and compare investments based on metrics such as web traffic and new users. (Financial Times)
Banks are using AI to:Devising more customized hedging solutions through products such as interest rate swaps and equity derivatives, enabling us to offer better pricing to our clients. Deutsche Bank uses it to analyze whether individual clients are overinvesting in certain products. Morgan Stanley developed his AI model that: Interpret whether communications from the Fed are hawkish or dovish. (Bloomberg)
New York Attorney May Be Sanctioned for Using Chat GPT and Fabricating Quotes It took six non-existent cases and made up some bogus citations. (Bloomberg)
2,550 UK private equity executives earned a total of £3.4bn of carry forward interest in the 2020-21 tax year. (Financial Times)
Currently, it is not easy to find postgraduate jobs in China. Youth unemployment is on the rise and Western Chinese students are still finding jobs in banking and tech, while domestic students are struggling and rethinking agriculture. (New York Times)
Chinese bankers are traveling less frequently. Stephanie Hui, head of Goldman Sachs’ private equity business in Asia, said she used to travel to the United States often to raise new capital. now, “I’m only going to America to see my boss.” (Reuters)
Nike’s Cowboy Boot Hybrid is popular and costs $650. (WSJ)
Impressions of IIT graduates. (Junior VC)
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