Citi Prime Finance Report Distills the Four Pillars of “People Alpha” at Hedge Fund Managers

Most hedge fund managers believe that people are their primary resource and that absolute, uncorrelated returns are a function of top talent.  Citi Prime Finance has coined a new and pithy term for this view – “people alpha” – and, in a recent report, outlined the building blocks of a robust human capital infrastructure at hedge fund managers.  Specifically, Citi’s report distilled best practices among hedge fund managers (based on interviews) in four critical human resources areas: talent acquisition, talent retention, employee learning and development and performance measurement and management.  This article summarizes key insights from the Citi report.  See also “How Can Hedge Fund Managers Use Profits Interests, Capital Interests, Options and Phantom Income to Incentivize Top Portfolio Management and Other Talent?,” Hedge Fund Law Report, Vol. 6, No. 33 (Aug. 22, 2013).

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