The article discusses how the hedge fund industry has shifted towards multimanagers, such as Millennium and Citadel, attracting significant capital and hiring rapidly. However, this aggressive growth has resulted in many portfolio managers exaggerating their performance records to secure lucrative contracts. With pay packages exceeding $50 million for top performers, there is considerable pressure to embellish results, complicating the trust between investors and traders as integrity becomes questionable in the race for wealth.
"A large percentage of PMs fluff their numbers," a recruiting exec at one large fund explained. There's increasing temptation to exaggerate when big paydays are involved.
The shift toward multimanager hedge funds has created a culture where portfolio managers can easily inflate their past performance, complicating trust for investors.
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