For investment banks’ traders looking to make the switch into a hedge fund, there have only been two really voluminous recruiters in the past couple of years – Millennium Management or Bluecrest Capital Management. Both have been hiring heavily from the bulge bracket banks, but a sink-or-swim mentality – and intolerance to underperformance – means that not everyone who comes on board lasts very long.
Both hedge funds make no secret of the fact that job security is shaky for portfolio managers who don’t make the grade Share on twitter. Andrew Dodd, CFO at Bluecrest, admitted that trader departures can be “slightly abrupt” if performance starts to wane. Meanwhile, Millennium money managers are given a small amount of capital to invest across multiple strategies set by a centralised senior management committee – if you’re successful, you get more capital, but if you’re not, departures can be swift.
So it is with some investment banking big hitters who made the buy-side switch recently. Zaki Dhabalia, who joined Millennium in March last year after a decade at Goldman Sachs where he was latterly chief gold trader, has now left the firm. Bobby Dziedziech, a former Lehman Brothers executive director who was a portfolio manager at Millennium’s Meadow Lake Capital Management, has also departed after just 11 months, according to filings on the FCA register.
Meanwhile, at Bluecrest, Nicholas Tuite, who was formerly at Barclays but worked at Omni Partners for a couple of months before moving to Bluecrest in March last year, has now left the firm.
There’s no indication that any of these were forced out, but previous form of these employers suggests that performance could have been an issue. They could have also been following an increasingly common career path of moving back from the buy-side into investment banking.
While investment banks are far from a stable option, the prospect of working for a hedge fund is now arguably shakier. Despite suggestions of hedge funds hiking pay to compete for talent from private equity firms and investment banks – as well as speeding up the recruitment process – it’s been a difficult year for the industry.
This year has been the worst since the 2008 financial crisis for hedge fund closures and larger firms have been shuttering unsuccessful funds after a period of underperformance. Brevan Howard pulled the plug on its $630m commodities hedge fund last week.