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Marshall Wace boss blames hedge fund talent war on excessive payouts

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Excessive payouts to poach staff made by some multi-strategy majors are fuelling a talent war in the global hedge fund industry, according to Marshall Wace Co-founder Paul Marshall and PAG Co-founder Chris Gradel.

A report by Bloomberg quotes Marshall as saying at a summit organised by the Hong Kong Monetary Authority on Wednesday, that while justified on some levels, the multi-strat business model has led to the “commodification of human talent” and a “merry-go-around” where new recruits stay for only two or three years before being fired only to then turn up at a rival firm.

“Everybody wants that Cristiano Ronaldo on their team. But there are not very many Cristiano Ronaldos. And what’s happening is everybody is getting paid the same as Cristiano Ronaldo,” said the boss of the $59bn Lonond-based hedge fund firm. “That is not the right way to build great businesses or even to build a great industry for our clients.”

Speaking at the same summit, PAG CEO Gradel said that some employees of his $53bn hedge fund platform business have been poached by rivals with eight-digit signing bonuses, describing it as “absolutely insanity.” PAG is a part owner of Polymer Capital Management.

“I think this is a temporary phase. It is a very bad phase,” he added. “It’s not good for the clients. It’s not good for the industry.”

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