Morning Coffee: The hottest hedge fund jobs of 2026 could be of this variety. Blackstone after the tragedy in July

It's late 2025. Markets are wobbling on fears that interest rates might not be cut again in December, credit cockroaches are generating 100% debt writedowns, and Michael Burry has just closed his fund, Scion Asset Management, claiming that the market has become unhinged from fundamentals. 

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2026 could be an interesting year, particularly in hedge funds where - as Satori Insights noted last month, much of the risk is accumulating. Multistrategy funds which have thrived since the financial crisis and pursue uncorrelated returns, could find the world unexpectedly correlated after all. But one species of hedge fund specialises in chaos: market dislocation funds.  

Market dislocation funds exist for the times when things snap. They don't have to snap dramatically on a macro level - micro snappings of individual corporate debts punished in "benign macro environments," are of interest too. In this sense, dislocation funds are similar to distressed debt funds, except they're explicitly about times when things break and markets stop working.

Scott Goodwin, a shiny-seeming former head of high yield trading at Citi, has got one of these dislocation funds with his good friend Jonathan Lewinsohn, and Goodwin thinks 2026 is going to be a fine year. Debt issued by both housing companies and AI firms could well become dislocated and distressed in 2026, say the two men. They've just raised $4.5bn for a new dislocation fund at their $25bn credit hedge fund Diameter Capital Partners, and they've generated returns of nearly 15% on capital invested this year. Next year could be better still, and even if it's not, the two men can afford to be patient - Bloomberg notes that the money invested in dislocation funds is locked up for longer than usual. 

Goodwin and Lewinsohn are just two guys in the credit ocean, but they're a reminder that as the cycle turns, new skills are likely to be popular. An understanding of the contractual complexities of loan workouts is already back in fashion at Ares. Distressed and dislocated credit managers could be the talent hotspots of the year to come.

Separately, Blackstone is still operating in the aftermath of the terrible shootings at its New York head office in July. 

Bloomberg reports that the firm has left the office of Wesley LePatner, the senior managing director who was killed in the lobby, untouched "as she left it". Jon Gray, the Blackstone president and LinkedIn influencer, now goes around with heightened personal security. Entering the office means passing 'half a dozen guards and a security dog.' It's still raw. “It was a profound loss,” says Gray of LePatner. He still tears-up when he mentions her name.

Meanwhile...

Restructuring professionals in Europe are feeling excited about 2026. (Bloomberg) 

Brevan Howard hired Tim Mace from Man Group as head of AI. (Bloomberg) 

Man Group has middle office jobs in London at risk of redundancy and will hire in Bulgaria instead next year. (Financial Times) 

Reasons to invest in Millennium: Shareholders are primarily buying a dividend stream funded by Millennium’s performance-fee income. Its clients pay away 20% of investment gains (subject to a minimum of 1% of assets under management) and absorb most of its operating expenses. If the fund generates a 12% return on $79 billion of managed assets, net income could be $1.5bn. (Bloomberg) 

Citadel's got a new European stock picking unit led by Nabeel Bhanji from Elliott Investment Management. Bhanji starts Monday. He's historically been an activist investor but he won't be doing this at Citadel where the approach will be: “Let’s look at companies we already like and size up the ones we like the best.” (WSJ) 

Profits at Nvidia, Amazon, Alphabet and Microsoft come from being a supplier to, or investor in, the private companies building the large language models behind AI chatbots. But firms like OpenAI are racking up massive debts as they refine their models. OpenAI's Q2 loss was equivalent to 65% of the rise in underlying EBITDA at Microsoft, Nvidia, Alphabet, Amazon and Meta together. (WSJ) 

JPMorgan has a good pipeline of female talent because it focuses on, “identifying the people that have the raw talent and then placing them in jobs where you are unfamiliar with the subject matter, and having the patience for that person to fumble their way into it.” (Fortune) 

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