Top Five Hedgehunters of 2011

Date: Monday, December 5, 2011
Author: HFObserver

Who hired the most in 2011?  Welcome to the $10 billion+ Club.

As hedge fund professionals prepare to enjoy the holiday season despite a rough year in the markets, HFObserver took a look back at 2011 to see which firms most actively brought on hedge fund/alternatives talent. The Top Five Hedgehunter list is based on publicly available information on approximately 900 hires made since the beginning of 2011. These counts only include full-time positions and do not include executive administrative positions.

Top Five Hedgehunters (assets under management):

1)     Citadel Investment Group ($11.0 billion)
2)     Bridgewater Associates ($70.0 billion)
3)     Millennium Management ($11.6 billion)
4)     Man Group ($40.0 billion)
5)     SAC Capital ($13.8 billion)

Runners-up:  Fortress Investment Group ($12.7 billion) and Two Sigma Investments ($7.0 billion).

HFObserver found that the Top Five accounted for 15% of hires made in 2011 (through 11/30), recruiting between 20 and 40 professionals each.

Talent follows assets, so it’s no surprise that hiring was concentrated among some of the world’s largest funds. All firms in our Top Five manage more than $10 billion in assets. However, there is more to hiring than sheer size. Citadel, Millennium, and SAC, as well as runners-up Fortress and Two Sigma, are not among the industry’s top ranked firms by assets. Nearly 40 firms in the industry now manage more than $20 billion.

Talent also follows performance, with Bridgewater returns exceeding 28% this year, according to Absolute Return Magazine (November 2011).

While size and investment performance may explain the hiring rates at some of these firms, others know the importance of scale as funds adapt to the industry’s new reality: a higher degree of institutionalization, higher inflows from corporate and government pension funds to the largest firms, and a greater emphasis on risk management.

In an industry of 3,500+ hedge fund organizations, the five largest firms (including Bridgewater and Man Group) run about 10% of the industry’s assets (II Rankings 2011). Just nine firms (including Millennium) attracted nearly 40% of new asset inflows in 2011 YTD (Bloomberg).

The funds that lost the most talent in 2011 were those that either shut down or are winding down operations, followed by the internal hedge funds/proprietary trading desks of the investment banks. Perry Capital is the hedge fund that announced (in October 2011) the largest round of layoffs, of approximately 30 employees.

This survey does not distinguish between hires for newly created positions and replacement hires for positions made vacant by voluntary or involuntary departures.