Multi-strategy hedge funds including Citadel, Point72 and Balyasny Asset Management are increasingly focused on developing junior talent in-house as competition and costs for experienced portfolio managers continue to rise, according to a report by eFinancial Career.
Rather than relying on expensive external hires, firms are investing in graduate and analyst programmes designed to nurture future portfolio managers internally, aiming to build more sustainable talent pipelines.
All three have expanded internal development initiatives, with a significant proportion of current portfolio managers having progressed through in-house training schemes. The approach is seen as a way to reduce long-term compensation inflation and improve retention, although some investors remain sceptical of managers who have not proven themselves outside structured programmes.
Senior managers note that mentoring juniors requires a different leadership style, with coaching and close oversight playing a central role. In some cases, portfolio managers can retain an economic interest in the performance of former analysts who go on to run their own books, providing an added incentive to identify and develop talent early.
At the same time, European trading businesses are enjoying their strongest period in more than a decade. Revenues are expected to reach €43.9bn in 2025, surpassing previous highs amid favourable volatility, strong client activity and improved risk discipline. Unlike past cycles, the year has been notable for the absence of major trading losses, helping banks convert market activity into sustained profitability.
