Two-Year Non-Competes Are Changing the Timeline of Quant Hiring

Citadel was reported in August to be requiring non-compete agreements lasting as long as two years for some investing staff, including some analysts.

According to Bloomberg reporting, analysts covered by the arrangements face a minimum restriction of one year, while the length of certain restrictions is linked to total compensation.

Restrictive covenants are nothing new in hedge funds or quantitative trading.

What is notable is the extent to which those timelines can now reach well beyond a conventional notice period, including for talent below Portfolio Manager level.

For a hiring team, that creates a simple problem.

The person identified as the strongest candidate today may not realistically be able to join for another 12, 18 or even 24 months.

That changes the way specialist quantitative hiring has to be approached.

If a team begins mapping the market only once a position becomes urgent, a meaningful part of the relevant talent pool may already be unavailable within the required timeframe.

It also changes how candidates are compared.

The strongest long-term hire may be restricted for 18 months.

Another candidate may be available in three.

Those are not necessarily questions of candidate quality. They are questions of business timing.

This matters particularly in quantitative investing, where relevant research experience, market knowledge and strategy exposure can take years to develop.

There may only be a relatively small group of people who genuinely solve the hiring problem.

Removing most of them because they cannot start immediately makes that market smaller again.