Market thugs attack hedge fund jobs while Goldman Sachs phones explode

Key Points:

• Hedge funds experienced a severe sell-off, particularly in AI and data center-related stocks, causing highly leveraged and correlated bets to unwind, with some describing the market turmoil as akin to "being attacked by three thugs."
• Many hedge funds are responding to losses by cutting staff, including significant layoffs at Walleye, Engineers Gate, and Brevan Howard, with expectations of further job reductions and portfolio manager exits.
• Optimistic statements from market leaders like Citadel Securities and Goldman Sachs about investor demand for AI deals and risk rebuilding have been contradicted by recent market events, raising doubts about upcoming IPOs such as Anthropic.
• Market risks remain high as mounting losses may force forced selling by risk managers, potentially triggering further market declines irrespective of fundamentals.
• Separately, Goldman Sachs promoted a record 109 new partners, including a notable increase in engineers and APAC partners, though concerns arise over diversity metrics and the impact on existing managing directors.