Key Takeaways
- • Hedge fund portfolio manager departures are accelerating, with Gallo Partners CIO Mike Alfaro saying 108 pods have been closed and that he has received a flood of recruiter calls and resumes.
- • Many of those let go recently joined their funds, including Anil Gondi (Walleye, joined 2025), Mike Daylamani (Engineers Gate, joined January 2025) and David Heinau (Brevan Howard, joined December 2025).
- • Per Bloomberg data cited in the article, many funds were already below Ken Griffin's performance hurdle of the risk-free rate plus 4% for the year to October, a hurdle the article puts above 8% based on current three-month Treasury yields.
- • Junior traders who joined buy-side funds in recent months bear the heaviest pain, while the article notes that banks' equities desks had a strong year with revenue per head up over 30% according to Tricumen.
- • Alfaro expects no V-shaped recovery and predicts a reassessment of what portfolio management involves, with more emphasis on genuine risk-takers.
Summary
Hedge funds are facing a difficult stretch, and eFinancialCareers reports that the pain is spilling into portfolio manager (PM) and junior trader ranks. Citing a Bloomberg chart of fund performance for the year to October, the article says many funds already trail Ken Griffin's viability hurdle of the risk-free rate plus 4%. With the current three-month Treasury yield above 8%, that hurdle now sits at over 8% itself, which the article describes as a bar many managers are failing to clear. Funds had already been dismissing PMs and returning cash before November, and the article expects the cuts to continue.
Mike Alfaro, CIO of Gallo Partners, a New York long/short equity fund, says 108 pods have been closed and that he has been inundated with recruiter calls and resumes. The article notes that departures from London hedge funds in the macro space had already reached 100 the previous month, and that the pace has since accelerated. One PM in his early 40s, who had been up 14% earlier in the year on a supposedly market-neutral book, is now down 9% and has been fired. The article reports he had been fielding offers from major multistrategy funds with $15m sign-on bonuses and had been holding out for a $6m year-end bonus.
Many of those cut only recently joined their firms. Anil Gondi, who ran Walleye's equity long/short business, joined in 2025 after a year of gardening leave following his departure from Balyasny in June 2024. Engineers Gate reportedly cut its stock synthesis team, including Mike Daylamani, who joined in January 2025. Brevan Howard cut David Heinau, who joined in December 2025 after eight years as head of proprietary trading at TD Securities in London. The most acute pain is felt by junior traders who joined buy-side funds in the past few months, one of whom described the buy side as being "squashed" and said he wished he had joined Jane Street or Citadel Securities instead.
The article notes it is unclear how the PM pain will affect the broader hiring market and bonuses at banks. Bank equities desks had an exceptional year, with revenue per head up over 30% according to Tricumen, and are expected to pay big bonuses, though an oversupply of hedge fund talent could limit pay pressure. Alfaro says the outcome depends on market direction: "I do not think there will be a V-shaped recovery." He expects a reconsideration of portfolio management, arguing that PMs who sold themselves as market neutral were in practice trading market moves, and that a clear-out may open opportunities for a new generation of traders. A veteran credit trader added, "I can't imagine this will be a good year for anyone."
Mike Alfaro, CIO of Gallo Partners, a New York long/short equity fund, says 108 pods have been closed and that he has been inundated with recruiter calls and resumes. The article notes that departures from London hedge funds in the macro space had already reached 100 the previous month, and that the pace has since accelerated. One PM in his early 40s, who had been up 14% earlier in the year on a supposedly market-neutral book, is now down 9% and has been fired. The article reports he had been fielding offers from major multistrategy funds with $15m sign-on bonuses and had been holding out for a $6m year-end bonus.
Many of those cut only recently joined their firms. Anil Gondi, who ran Walleye's equity long/short business, joined in 2025 after a year of gardening leave following his departure from Balyasny in June 2024. Engineers Gate reportedly cut its stock synthesis team, including Mike Daylamani, who joined in January 2025. Brevan Howard cut David Heinau, who joined in December 2025 after eight years as head of proprietary trading at TD Securities in London. The most acute pain is felt by junior traders who joined buy-side funds in the past few months, one of whom described the buy side as being "squashed" and said he wished he had joined Jane Street or Citadel Securities instead.
The article notes it is unclear how the PM pain will affect the broader hiring market and bonuses at banks. Bank equities desks had an exceptional year, with revenue per head up over 30% according to Tricumen, and are expected to pay big bonuses, though an oversupply of hedge fund talent could limit pay pressure. Alfaro says the outcome depends on market direction: "I do not think there will be a V-shaped recovery." He expects a reconsideration of portfolio management, arguing that PMs who sold themselves as market neutral were in practice trading market moves, and that a clear-out may open opportunities for a new generation of traders. A veteran credit trader added, "I can't imagine this will be a good year for anyone."
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