Key Takeaways
- • Citadel was up 1.7% in October according to the FT, while several peers posted losses, including Millennium (down 2.3%), LMR (-0.8%), Dymon (-1.8%), NorthRock (-2.3%), ExodusPoint (-2.4%) and Marshall Wace (-5.4% equity), per Bloomberg and the FT.
- • Citadel has expanded its people analytics team, run by Davis Carlin, a former McKinsey partner who joined in 2024, with Keith McNulty hired in January as head of assessments and Kevin Navikas hired in September to cover fixed income in New York.
- • Compensation at hedge funds is increasingly based on total cost of generating returns, not just PnL, including brokerage, market data, team and office costs, according to Richard Averill of Waterline Economics.
- • Millennium pulled $1.5bn of external investments from Axebrook and Troluce Capital after losses at both firms, per Bloomberg.
Summary
Citadel posted a 1.7% gain in October, according to the Financial Times, a result that stands out in a difficult stretch for the hedge fund industry. Peers reported losses for the month. Bloomberg reported that LMR fell 0.8%, Dymon 1.8%, NorthRock 2.3%, Marshall Wace 5.4% in its equity strategy and ExodusPoint 2.4%. The FT said Millennium was down 2.3% in October, and Bloomberg reported that Millennium pulled $1.5bn of external investments from Axebrook and Troluce Capital after losses at both firms.
The report notes that a handful of people have left Citadel's London business for reasons that are not clear, with some departures occurring in September, before the October losses at other funds. Citadel declined to comment.
Citadel is also building out its people analytics function. The team is led by Davis Carlin, a former McKinsey & Co partner who joined in 2024. In January, Citadel hired Keith McNulty, also from McKinsey, as head of assessments, and in September it hired Kevin Navikas, a people analytics specialist, to cover the fixed income business in New York. The article characterises this as a shift toward a more scientific approach to appraising staff, though it notes the trend is only indirectly related to performance.
Compensation may follow from Citadel's strong October, but Richard Averill, founder of Waterline Economics, which provides compensation analytics for hedge funds, said the calculation is more complex. "Funds now try to take everything into account," Averill said. "It's not just about PnL but the costs involved, including brokerage, market data charges and team and office costs." He argued that PnL generated through expensive prime brokerage arrangements is worth less than PnL earned cheaply, comparing the lesson to one banks learned after 2008.
The report notes that a handful of people have left Citadel's London business for reasons that are not clear, with some departures occurring in September, before the October losses at other funds. Citadel declined to comment.
Citadel is also building out its people analytics function. The team is led by Davis Carlin, a former McKinsey & Co partner who joined in 2024. In January, Citadel hired Keith McNulty, also from McKinsey, as head of assessments, and in September it hired Kevin Navikas, a people analytics specialist, to cover the fixed income business in New York. The article characterises this as a shift toward a more scientific approach to appraising staff, though it notes the trend is only indirectly related to performance.
Compensation may follow from Citadel's strong October, but Richard Averill, founder of Waterline Economics, which provides compensation analytics for hedge funds, said the calculation is more complex. "Funds now try to take everything into account," Averill said. "It's not just about PnL but the costs involved, including brokerage, market data charges and team and office costs." He argued that PnL generated through expensive prime brokerage arrangements is worth less than PnL earned cheaply, comparing the lesson to one banks learned after 2008.
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