Hedge fund ExodusPoint Capital Management is broadening its controversial bonus clawback policy to include senior non-investment staff, signalling a shift in how firms compete for and retain talent amid a heated labour market in the hedge fund industry, according to a report by Bloomberg.
The report cites unnamed sources as revealing that under the updated policy, employees may be required to repay up to 40% of their 2024 bonuses if they leave the firm before the end of 2025. The change, communicated to staff recently, comes as the firm prepares to distribute year-end bonuses.
ExodusPoint already enforces similar clawbacks for its investment team.
A representative for the firm declined to comment.
ExodusPoint’s move mirrors a broader trend in the hedge fund sector, where intense competition for top talent has led firms to adopt aggressive retention strategies. Earlier this year, Eisler Capital implemented a rule requiring traders to return their 2023 bonuses if they departed before year-end.
Founded in 2018 by former Millennium Management executives Michael Gelband and Hyung Lee, ExodusPoint debuted with $8bn in assets, marking the largest-ever hedge fund launch. However, the firm’s performance has lagged behind competitors in recent years.
As of November 2024, ExodusPoint reported an 8.6% gain for the year, trailing firms like Citadel, Millennium Management, and Balyasny Asset Management, all of which achieved double-digit returns.
In an effort to address client concerns, the firm introduced a policy in September waiving performance fees if returns fall below three-month Treasury yields for a year, provided investors agree to extended capital lock-up periods.
