Hedge fund Garda Capital Partners has filed a lawsuit against rival Schonfeld Strategic Advisors, alleging it unlawfully lured away one of its most prominent fixed-income portfolio managers, Nicolas Monaghan, in violation of his non-competition agreement, according to a report by Bloomberg.
The complaint, filed in New York state court, claims Schonfeld “induced” Monaghan to resign improperly from Garda, where he was described as a critical contributor, generating over $250m in profits since joining the firm in 2019. Garda, based in Wayzata, Minnesota, argues the move undermines its business and violates contractual agreements.
Garda noted that it and Schonfeld operate similar fixed-income strategies and were recently ranked as the 41st- and 42nd-largest hedge funds globally by Pensions & Investments.
“Garda and Schonfeld compete with one another at the highest level of the financial services industry,” the firm stated in the suit.
This legal action comes shortly after another high-profile dispute involving Jane Street Group, Millennium Management, and former traders over proprietary trading strategies, which was settled last week.
Monaghan, along with analyst Thibault Cons, signed three-year employment agreements with Garda in late 2022. These agreements, effective March 2023, included compensation terms and non-compete clauses prohibiting them from joining competitors until March 2026.
Garda alleges Monaghan and Cons resigned in April, claiming excessive work hours — a justification Garda called “contrived,” noting that the two managed their own schedules. Their departures pre-empted substantial bonus payments, with Monaghan forfeiting nearly $8m and Cons $1m, according to the suit.
The lawsuit alleges Schonfeld persuaded the pair to leave Garda by offering lucrative future roles that would offset their forgone bonuses.
According to Garda, Schonfeld began engaging with Monaghan and Cons in July 2023. Monaghan allegedly took steps to prepare for his transition, including creating multiple companies and relocating to Monaco. Garda claims these actions disrupted its operations, forcing the firm to liquidate Monaghan-managed investment positions prematurely, resulting in millions of dollars in lost profits.
Monaghan and Cons are not named as defendants in the lawsuit. Attempts to reach them for comment were unsuccessful, while Schonfeld also declined to comment on the case.
Schonfeld, based in New York, manages assets for billionaire Steven Schonfeld and external investors, employing a mix of quantitative, fundamental, and tactical strategies. Garda, which oversees more than $10bn in assets, specialises in relative-value trading across developed market interest rates, commodities, and equities.
Garda is seeking damages related to the financial impact of Monaghan and Cons’ departures.
The case, Garda Capital Partners v Schonfeld Strategic Advisors, is being heard in New York State Supreme Court, New York County.
