How are alternatives managers thinking about the FTC non-compete ruling?

On April 26, 2024, the Financial Times article, Ban on Non-Compete Agreements Sends Shockwave Across Wall Street, began with “The US Federal Trade Commission’s action to ban non-compete agreements has left Wall Street businesses rushing to restructure contracts and find new ways to tie down the high-priced personnel that their business models rely on.”

The article went on to describe a rush of activity and debate as firms proactively explored "workarounds that will allow Wall Street to continue to protect its intellectual property and trade secrets" rather than waiting on the results of legal challenges underway.

Six weeks later, there seemed to be very little actual activity, at least among the alternative investment community I work with.

An inquiry from a London based fund manager inspired me to test this view with a broader network of human resources and executive recruiting professionals and publish a short AMA on the consensus view that emerged:

• The situation is still in early innings and firms are taking a wait and see approach, anticipating the ban will either be vacated or appealed.
• The ruling itself is not straightforward with variables such as difficulty in interpretation, variance in existing state laws and the overall political climate to consider.
• There seems to be mixed levels of preparedness should it go into effect in August, with most firms holding off even planning for possible implementation.
• Of the nine human resources and existing recruiting professionals who shared insights, no one reported changes to their hiring processes or existing contracts as of today.

So, for now, we can head into the weekend worrying about Giant Venomous Flying Spiders With 4-inch Legs Heading to New York Area instead?

Wishing everyone a wonderful weekend!

~Laurie Thompson

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About Willow Hill Advisors

Laurie Thompson founded Willow Hill in September 2019 after spending 16 years in the financial services practice of Heidrick & Struggles.

She has placed fundraising and investor relations professionals from the Partner, Head of Global Distribution level through Associate, with a concentration on senior-level hires. Clients (hiring firms) are predominately top-tier alternative investment managers.

Willow Hill is exclusively a retained firm and executes only a select number of mandates at a time, ensuring hiring firms receive the highest level of focus and attention. Through deep market knowledge, long term relationships and established trust, Willow Hill provides unconstrained access to top caliber talent while ensuring potential placements are thoroughly vetted and referenced.

[email protected]

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Author’s note:

Additional AMAs and reports can be found here: https://willowhilladvisors.com/thought-leadership/

As always, feedback, questions and topic suggestions are welcome and appreciated.

~ Laurie