Dan James has worked on the sell-side. He's worked on the buy-side. And now, he's morphing into a person know for a job in hedge funds.
James, who was a Goldman Sachs managing director and head of synthetics and quant sales between 2014 and 2018, has just opened a search boutique, Monroe Partners with veteran headhunter Christian Robbins.
James spent the past four years in business development for hedge fund Millennium Management, scouting for portfolio management talent. His decision to go into headhunting instead reflects the opportunity created by competition for talent between big multi-strategy hedge funds. “As assets under management at the big multi-strategy funds keep rising, those funds are looking for different sources of alpha and there’s a growing need to identify top investment talent,” he says.
While some funds, like Point72 and Balyasny grow their own portfolio managers in-house, and while Millennium has a graduate training programme run in conjunction with UBS, many funds still scour banks for top trading talent to become PMs. “Banks are still a stable of talent for hedge funds," says James.
One bank trader who recently moved to a hedge fund says the key criteria for getting hired by the buy-side is $50m in PnL. While this is often the key criteria, funds will typically also consider volatility, the Sharpe ratio, drawdown and the amount of capital a trader run. The ideal is usually to hire a trader who can still generate alpha while running several hundred million in funds.
"My sell-side career was all about sales and talent acquisition is fundamentally a sales job, so there’s a big crossover,” says James.
Brevan Howard recently hired Harry Simons, a former headhunter at Heidrick & Struggles, to help it hire portfolio managers across global macro. Various funds have focused on talent development this year: Bridgewater, for example, was seen hiring a director of talent development in January. Jump Trading recently hired Daniel Montellese, a former technology recruiter at Citadel Securities as its own head of technology acquisition in the US. Talent scouts are themselves valuable talent: Montellese had a one year non-compete when he left Citadel Securities.
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