The frenzied pursuit of Wall Street's low-profile all-stars

In exchange for the rich pay packages, portfolio managers are expected to perform

- Peter Rudegeair & Gregory Zuckerman

Billionaire Steve Cohen doesn't like losing out on superstars. In December, the New York Mets owner made headlines for paying $765 million to sign phenom outfielder Juan Soto, beating out the New York Yankees and the Boston Red Sox.

Around the same time, Cohen and his investment firm Point72 were facing off against rival hedge-fund giants to poach a young stock picker who had become one of Wall Street's hottest free agents.

The price tag to land Kevin Liu escalated so quickly that one person familiar with the process likened it to an art auction at Christie's or Sotheby's. Citadel, Millennium Management, and Balyasny Asset Management all tried to hire Liu away from Marshall Wace, where he had posted big gains trading tech stocks. With a five-year deal worth tens of millions of dollars, Cohen won out.

The world's most influential hedge funds are in a battle for recruits and they are fighting with escalating volleys of money. Elite portfolio managers at hedge-fund firms can command pay packages of more than $100 million over several years, putting them in league with some of Wall Street's best-paid executives despite being relatively unknown even within the industry.

Capital has flooded into "multimanager" hedge funds, sprawling enterprises made up of semiautonomous teams that each deploy huge amounts of money. Perhaps the firms' biggest challenge is finding enough traders with the skills to deploy it all. If profitably running a $1 billion book was table stakes a few years ago, top talent might now be asked to run $5 billion while raking in nine-figure investment profits.

Big-name fund founders get involved to help close deals with sought-after new hires. Dmitry Balyasny, for instance, has been known to take candidates that his eponymous firm is courting on mountain-bike rides or to Central Park to play pickleball.

At Point72, Cohen had dinner with Liu, who is in his early 30s, and offered to mentor him personally.