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- As hedge funds have become sophisticated, their talent needs have evolved — and top managers now are searching out people with engineering abilities or data science skills.
- This has put managers in direct competition with big tech firms, and a years-long battle over talent has ensued.
- Hedge funds like Two Sigma, Citadel, and Bridgewater have managed to bring in more people from big tech firms over the last ten years than it has lost.
- Amazon and Microsoft have seen hundreds of people leave their organizations for hedge funds.
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Hedge funds are used to having to fight with each other for top talent. But they've never had to compete with a whole different industry like they are now.
Top tech companies and the savviest hedge funds in the world both need employees with specific skills to keep up — and keep ahead — in a rapidly changing world. Data scientists, coders, engineers, systems managers — while those skills might seem to make most sense in Silicon Valley, Wall Street has been working for years to recruit these people. Their efforts are starting to pay off.
New data from Revelio Labs, an alternative-data provider that reviews millions of public employment records — from LinkedIn to immigration filings — with the goal of creating "the world's first universal HR database," show hedge funds have been recruiting hundreds of people from top tech companies annually since 2015. In 2018 alone, more than 270 people went from a tech firm to a hedge fund. (Story continues below graphic)
Anecdotally, there are examples as well, especially from the two hedge funds that have recruited the most from tech companies over the last decade, Two Sigma and Citadel. Two Sigma's former chief technology officer Alfred Spector was a longtime Google and IBM executive before joining the hedge fund, and Citadel's recent tech team buildout includes Matthew Bruce, who had been head of search at Facebook's Instagram.
A source familiar with Ray Dalio's Bridgewater says the firm has more than 150 technologists since 2017, and DE Shaw describes itself on its website as a "global investment and technology development firm." (Story continues below graphic)
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Naturally, top tech firms have not taken this and rolled over. While massive companies like Amazon and Google have had hundreds of employees leave for hedge fund suitors, IBM has added nearly 200 former hedge-fund employees over the past decade — and lost just 77 in the same time.
The firms mentioned either declined to comment or did not return requests for comment.
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Read more:
- $60 billion quant fund Two Sigma just hired Goldman Sachs' first-ever chief data officer to lead its massive tech team
- Citadel just poached Two Sigma's data chief for its tech team — and it's the latest sign of how aggressively the $30 billion firm is pursuing top talent from Wall Street and Silicon Valley
- 'I'd rather turn them into robo cops': Execs from Man Group, Bridgewater, and Schonfeld explain how they're trying to blend humans and machines
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