LONDON—Investment duo Paul Marshall and Ian Wace outran competitors during the recent market turmoil with an unconventional trading strategy: a top-secret algorithm that analyzes tips from rival hedge funds and investment banks.

It’s Wall Street meets fantasy football. Stock salespeople and others across Wall Street submit trading recommendations to the duo’s hedge-fund firm, Marshall Wace. The firm analyzes the ideas and rewards firms of top contributors with millions of dollars of commissions each year.