Garda Accuses Rival Schonfeld of Poaching Star Portfolio Manager

(Bloomberg) — Garda Capital Partners sued Schonfeld Strategic Advisors, alleging its rival hedge fund schemed to recruit a top fixed-income portfolio manager in violation of his non-competition agreement.

Schonfeld “induced” Nicolas Monaghan to improperly quit his position as “one of Garda’s most important portfolio managers,” according to the suit filed Friday in New York state court. Wayzata, Minnesota-based Garda said Monaghan had generated more than $250 million of profits since joining the firm in 2019.

The suit is the latest legal battle to erupt as Wall Street firms compete for talent. Just last week, Jane Street Group, two of its former traders and Millennium Management agreed to settle a blockbuster case alleging the men stole a secret billion-dollar India options trading strategy when they left for Izzy Englander’s hedge fund group.

Schonfeld declined to comment. It’s not clear if Monaghan has joined that firm yet. Garda didn’t immediately respond to a request for comment.

In its suit, Garda highlighted the fact the firms had similar fixed-income strategies and were recently ranked the 41st- and 42nd-largest hedge funds in the world by Pensions & Investments magazine. 

“Garda and Schonfeld compete with one another at the highest level of the financial services industry,” Garda said 

‘Forgone Bonus’

According to the suit, Monaghan and Thibault Cons, an analyst hired to support the portfolio manager, agreed to non-competes in late 2022 when Garda allowed them to move to Zug, Switzerland, from Geneva for tax purposes. 

The three-year employment agreements, which became effective in March 2023, also set out compensation for the two men. Garda said Monaghan was paid $27.5 million during the course of his employment at the firm, while Cons was paid around $3.3 million. The non-compete provisions apply until the agreement expires in March 2026, Garda says.

Monaghan and Cons are not defendants in the New York case. Contact information for the two couldn’t immediately be located. 

The two allegedly quit Garda in April, saying they were being forced to work too many hours. Garda called this claim “contrived” in its suit because the men were in charge of their own work schedules. They also quit before Monaghan would have received a 2025 bonus of almost $8 million, while Cons was set to receive $1 million, Garda said.

“Schonfeld induced them to forgo such substantial economics by offering them lucrative future employment (in competition with Garda) that would make them whole, at least, for these forgone bonus payments,” Garda said. 

Monaco Move

Schonfeld started communicating with the pair in July 2023, according to the suit, and Monaghan began making preparations for his new role before departing Garda. These steps allegedly included creating several companies and moving to Monaco. 

Garda is seeking damages it sustained because of Monaghan and Cons’ departures. “Garda had to sell prematurely — at suboptimal prices — investment positions Monaghan was managing, forgoing millions of dollars in profits to the fund and Garda,” the firm said.

New York-based Schonfeld manages money for billionaire Steven Schonfeld as well as outside capital and employs quantitative, fundamental and tactical strategies. Garda manages more than $10 billion of assets and focuses on relative-value trading involving developed markets interest rates, commodities and equities. 

The case is Garda Capital Partners v Schonfeld Strategic Advisors LLC, New York State Supreme Court, New York County.

–With assistance from Hema Parmar.

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