Times may be tough for European hedge fund startups, but their struggles are proving a boon to some of the industry's biggest names.
Major U.S. hedge funds, including Millennium Management, Pine River Capital Management and SAC Capital Advisors have taken advantage of the failure of a number of hedge funds founded by former European bankers to hire away their talent, Bloomberg News reports.
Pine River has hired Evan Pearce, formerly of Edoma Partners, a hedge fund founded by Goldman Sachs' former proprietary trading chief, Pierre-Henri Flamand. Flamand shuttered Edoma in November after performance and asset losses. Other Edoma veterans have gone elsewhere, including Oliver Haslam, who joined Millennium this month, and Louis Villa, who joined SAC.
SAC also added Paul Selvey-Clinton, a former analyst at Occitan Partners, a hedge fund led by former Nomura trader Herve Gallon that has suffered major losses. Occitan also lost analyst Inigo Edsberg to Arrowgrass Capital Partners.
Another struggling new hedge fund, former Citigroup proprietary trading chief Sutesh Sharma's Portman Square Capital Management, has lost trader Paul Godfrey to Pine River.
Citadel Investment Group, meanwhile, has taken advantage of the premature demise of Benros Capital partners, founded by two former Goldman Bankers, to hire analyst Aaron Ezgar.
"The smaller firms and the startups are really quite exposed," executive-search firm Purcell & Co. CEO John Purcell told Bloomberg. "If they lose assets, they really struggle to raise them again—that's the risk of going to a smaller firm. In a time of nervousness, there is often what we call a flight to quality both for employees and investors."