How Dmitry Balyasny’s $21 billion hedge fund is looking to get ahead in the war for investment talent

  • With two programs, Balyasny Asset Management has been increasing its internal talent pool.
  • In October, the firm’s founder stated that it had hired 40 portfolio managers in the previous year.
  • Its partners, Bill Wappler and Sebastiaan De Boe, spoke about the Anthem program and how it has evolved.

When Sebastiaan De Boe considered leaving his job as a senior analyst at Citadel to become a portfolio manager, he knew he faced a daunting list of tasks.

A new firm and role would entail creating a new investment strategy, hiring a team, and constructing infrastructure, as well as reaching a break-even point. One firm he was considering stood out: Dmitry Balyasny’s namesake hedge fund and its Anthem program for aspiring portfolio managers.

“The whole offering got me over the line,” De Boe explained. “But I think the key thing was this specific pathway, and that BAM would be the smoothest journey to becoming a successful and profitable PM that over time could run a larger book.”

Hedge funds are discovering that having deep pockets isn’t enough to attract portfolio managers in the talent wars. Talent development has also become a strategic priority for companies seeking to remain competitive.

“You definitely have to do both,” Balyasny told an audience at the Capitalize for Kids Investors Conference last month in Toronto. “In any successful business that you look at in this industry or others that have been around for multiple decades, they’re building as well as buying.”

Balyasny, whose net worth is $21 billion, has hired 40 portfolio managers in the last year, according to him. It has also spent money on talent development. The business development team, which is in charge of hiring new employees for the Chicago-based firm, has grown to more than 50 people. It has a team of about 20 people dedicated to developing investment talent.

“So it’s not just hiring the PM but investing around them to build a top-tier team and all the infrastructure and tools they need,” he said at the event.

Investors have poured money into multi-strategic hedge-fund firms such as Balyasny, Millennium Management, and Citadel, hoping that their portfolio-manager pods will deliver consistent returns in volatile markets. As a result, these funds have more money to hire top traders, resulting in a fierce competition for a relatively small pool.

Initially focused on long-short strategies, Balyasny has been diversifying by developing quantitative strategies and hiring quants, according to a recent podcast. He also stated that it was expanding its commodities business. In 2023, the fund underperformed its multi-strategy peers. Its global equities head, as well as several other portfolio managers, left in October.

Balyasny has increased its focus on attracting investors in order to keep up with the ruthless talent cycle. Anthem, the portfolio-manager development program for senior analysts with seven or eight years on the buy side, launched in late 2015. It began with long-short equity but later expanded into quant in 2021 and macro in early 2023.

It is also expanding its six-month program to provide training and tools to junior analysts with one to five years of experience in equity research in order for them to become senior analysts who are integrated into existing investment teams.

Bridger, the program, will debut in the United States in 2022 with four analysts. It plans to have 50 to 70 analysts worldwide by 2024. Next year, it will launch its first class in Europe.

Inside BAM’s equity-investor training program

While Balyasny’s programs are intended to help employees, they are also competitive and demanding. The Anthem program has a graduation rate of 50%.

The low graduation rate is intentional, according to Bill Wappler, Balyasny’s director of research and partner, who developed and runs Anthem Equity alongside Bridger. Wappler handled analyst training and development for billionaire Steve Cohen’s Point72 before joining in 2015 to help Balyasny run his book and find ideas.

“We want to keep the program very select and difficult to get into,” he went on to say. “This should mark a real milestone in that person’s career.”

Anthem participants are given a small sum of money to manage and deploy. (Balyasny refused to provide figures.) Wappler and his team coach them for 18 to 24 months as they fine-tune their portfolios, build their teams, and set up their infrastructure, which includes building out models and finding the right datasets. They operate within a risk framework that is more stringent than that imposed on the firm’s veteran portfolio managers.

“For many of the Anthem participants who don’t make it through, it’s either because they struggle to navigate the transition successfully or they come to realize that their strengths are more in the analyst role rather than in portfolio management,” he went on to say.

Ten of the program’s 20 graduates are still working at BAM.

BAM’s portfolio managers in training get mentorship from the top

De Boe, who is based in London, joined Balyasny in 2017 and is now one of 19 partners at the hedge fund.

He published his book in March 2018, during a particularly difficult period for his industry: healthcare. While De Boe dismissed Wappler’s advice to wait, he did follow his suggestion to start with a smaller book.

The London Business School alum stated that, in addition to identifying the weak points in his portfolio early on, Wappler and his team provided him with mentorship and space to fine-tune his process.

“Being in the Anthem program, where you get a lot of support and coaching at the onset, helps you more effectively put together a better version of that process that works for you,” he said.

He still speaks with Wappler almost every day. “Now we discuss different things than when I started, but the dialogue continues,” he said.

De Boe also mentors new PMs through a program that pairs upstart investors with veterans at the firm to encourage collaboration.

As a group that “has grown and produced successful people like Seb, it has been great to see existing legacy PMs asking to be more involved and volunteer to be mentors,” Wappler went on to say.

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