TheChek News Flow

Ryan Walsh is representing stock pickers and bond traders in multimillion-dollar contract negotiations

Top hedge-fund recruits are getting hounded with job offers that would pay them like Hollywood stars or pro athletes. So why don’t they also have agents representing them?

That’s the idea Ryan Walsh had about a year ago when he launched a talent agency dedicated to stock pickers, bond traders and other investment professionals that he believes is the first of its kind. A former portfolio manager at firms including Citadel and Millennium Management, Walsh is now parlaying his own experience to help clients navigate a manic marketplace for hedge-fund jobs.

“I’m looking to be the Scott Boras of the hedge-fund world,” said Walsh, referring to the baseball superagent who negotiated record-breaking contracts for major-league sluggers like Juan Soto and Bryce Harper. Hanging on the wall of his office is a work of art featuring Ari Gold, the fictional agent from the TV series “Entourage.”

Elite hedge funds are flush with more capital than ever, especially multimanager funds that parcel out tens of billions of dollars across hundreds of semiautonomous teams. Their need to hire enough people to deploy that money profitably has prompted bidding wars for proven performers and high-profile poachings.

Walsh, 43, said he has helped 12 clients land jobs as portfolio managers in deals worth a combined $180 million since launching his firm, Laurel Lake Advisors. Citadel and Millennium are among the firms that he says have hired his clients, which include analysts who moved into roles overseeing their own portfolio of investments and portfolio managers willing to switch teams when the right offers came along.

In exchange, clients pay Laurel Lake a single-digit percentage of their overall contract value as a commission, excluding what the clients get to hire their teams. Laurel Lake’s rate can go higher if the deal size exceeds certain hurdles. Its fee also includes the cost of a law firm it works with that reviews clients’ employment agreements.

Walsh started the firm as a one-man shop and recently hired another agent, a former hedge-fund recruiter based in Europe, to help.

Depending on the hedge fund, many or all of the commercial terms of a portfolio manager’s contract are negotiable. For example, one of Laurel Lake’s clients received an offer that included a seven-figure upfront payment that was lower than he sought. Walsh and his client countered with what he called a “market-leading” cut of all investment profits for the five-year life of the contract.

“The job he’s doing, my sense is it requires a certain sense of chutzpah and commercial sense,” said Cliff Sosin, who runs the hedge-fund firm CAS Investment Partners and has been friends with Walsh since they went to the same private high school together in New Haven, Conn. “You have to be willing to call these firms and say ‘F you, this guy is worth more.’”

Compared with, say, outfielders, portfolio managers have to evaluate job offers with more complex structures. There’s the amount they’d need to cover deferred and forgone pay at their current employer and the budget needed to staff a team of analysts.

There’s the cut of investment gains portfolio managers generate that they get to keep, usually around 20%, and the accelerated payouts they can get on early profits. There’s also the length of the contract itself, usually around three years but sometimes longer.

The two sides also need to agree on whether new hires would get any slack to weather a slump. Portfolio managers are often pushed out mid-contract if losses reach a predetermined level.

Walsh saw a need for an agent after peers of his were getting offers worth $50 million and relying on friends to opine on whether they were good deals. Portfolio managers who have been in the same job for years might not know what the going rate is for someone with a given specialty and track record, or which funds have specific needs or have agreed to certain terms with new recruits recently. Walsh hustles to get and share that intelligence.

“You shouldn’t negotiate a life-changing contract by yourself,” he said.

Like hedge-fund headhunters, Walsh constantly cold calls and messages prospects to find out who might want to make a move. The main difference is that traditional recruiting firms get paid by the hedge funds themselves and sometimes agree not to poach employees of key clients.

The business is dependent on the scale and proliferation of multimanager hedge funds and could dry up if funds suffer a run of poor performance or redemptions.

Laurel Lake is named after the Connecticut body of water that Walsh lives alongside with his wife and two daughters.

Walsh started his hedge-fund career at Millennium in 2006 as an analyst focused on energy stocks. He bounced around in the following 18 years to other funds including Senator Investment Group, Citadel and LMR Partners, as well as a second tour of duty at Millennium. A plugged-in extrovert, Walsh tracked the ups and downs and comings and goings of his peers almost as closely as the energy companies he covered, former colleagues said.

The largest pay packages for star portfolio managers can exceed $100 million over several years. Walsh never received one that big when he worked in hedge funds, and Laurel Lake hasn’t negotiated one of that size. It’s an open question as to whether traders in that tier will see a need to hire an agent since they are already well-known and can often name their price.

As a portfolio manager, Walsh was glued to his computer screen or meeting with companies from a few hours before the market opened straight through until the close. Now that he works on behalf of portfolio managers who keep that schedule, he starts taking calls as early as 5 a.m. and finishes as late as 10 p.m.