A David and a Goliath of the hedge fund consulting world are in a legal battle that might rock the industry.
Aksia LLC, New York, has alleged in a lawsuit filed in New York State Supreme Court that larger rival Albourne Partners Ltd. not only actively recruited two of its employees, but also received and acted upon confidential proprietary information brought by those employees about Aksia's client base, investment research and methodology, and business practices.
Industry sources said the spat is evidence of increasing competition between specialist hedge fund consultants, perhaps the narrowest investment consulting niche dominated by only a handful of specialists working with institutional investors.
Aksia is suing the two former employees — Sarah J. Cole and Corissa L. Mastropieri — as well as London-based Albourne Partners; its U.S. subsidiary, Albourne America LLC; and six Albourne executives, including CEO Simon Ruddick.
Ms. Mastropieri resigned from Aksia on Dec. 8 and Ms. Cole tendered her resignation on Dec. 16. Both were members of Aksia's Americas advisory team.
Ms. Cole was hired on Dec. 29 by Albourne America as marketing manager in the firm's Norwalk, Conn., office. Albourne Partners hired Ms. Mastropieri on Jan. 15 as senior portfolio analyst at its London headquarters.
According to the complaint, the two took confidential and proprietary client information, research reports, business information, investment methodologies and marketing plans. They're accused of downloading a total of more than 100,000 pages from Aksia computers and taking 6,000 printed pages from Aksia's offices that contained the company information.
The suit alleges that Albourne Partners received the Aksia information the pair took with them. Also according to the suit, Ms. Cole and Ms. Mastropieri contacted current and potential Aksia clients and asked them to move their business to Albourne or to select Albourne during a search.