Hedge Fund Traders on a Bad Streak Are Hottest Recruits Around

Millennium Management, Citadel and Point72 Asset Management aren’t noted for their charity when dealing with loss-making traders. The outcome is often brutal and swift: Culpable parties are usually shown the door.

And yet a fierce talent war between the top hedge funds is demolishing old certainties in this booming $4.5 trillion industry. Winston Cheong, David Brodsky, Paul Netter and Rob Banham were all leading managers at marquee names offered a stab at redemption after losing tens of millions of dollars.

As with elite footballers hitting a rough patch, the firms looked at their prior runs of stellar ...