Any traders in investment banking hoping that hedge funds will provide a sanctuary to the current cuts need to think again – they’re cutting their trading teams, and cutting aggressively.
A recent poll of head and senior traders by consultants Greenwich Associates showed that 44% of hedge funds intend to shrink their trading budgets from last year on the back of a period of depressed activity. Not surprisingly, headcount reductions are planned, as over-sized trading teams now have less to do.
It’s not all gloom, however, as 40% of respondents to the survey said they were keeping their budgets flat and 17% said they were increasing them.
Still, this appears unlikely to benefit trading staff within hedge funds as the investments will focus on electronic trading, in order to increase trading volumes without bolstering staffing levels, new execution methods and a scaling back of sell-side support resources.
There are instances of larger hedge funds continuing to build their headcount, however. As we pointed out this week Winton Capital has aggressively increased its staff levels over the last 12 months (albeit predominantly in research rather than trading) and Marshall Wace has hired Ian Smillie, previously head of RBS’s equity research team. Brevan Howard is also bolstering its team in the US.
99% muppet references at Goldman referred to last year's movie (Financial Times)
Investment bankers may complain about lower pay, but their compensation is in a class of its own. (Wall Street Journal)
Jamie Dimon: “We’ve lost $5 billion to $10 billion on various things related to Bear Stearns. And yes, I put it in the unfair category.” (Times)
J.P. Morgan’s CFO, Douglas Braunstein is thinking of leaving his role and moving back into investment banking (Bloomberg)
UBS’s chief operating officer only investigated Kweku Adoboli’s trades, ignoring the actions of potentially complicit colleagues on his desk (Bloomberg)
Greg Smith was well-liked at Goldman. His former colleagues organised a ping-pong party to see him off to a new position in London. His upcoming book feels like a “drive-by shooting”. (Financial Times)
The governor of the Bank of Greece was given a €3.4m pay off by his former employer (Reuters)
Barclays will no longer offer incentive bonuses to retail banking staff (BBC)
Londoners love bankers really (Financial News)
A pictorial guide to City scandals (Telegraph)
HSBC cutting investment bankers in Hong Kong (MENAFN)
Flexible working could seriously damage your career (Wall Street Journal)
Goldman Sachs staff love the Muppets Movie (Finansakrobat)