It's the equivalent of earnings season for London's unlisted hedge funds and boutique M&A firms. Yesterday we had news of Balyasny Asset Management's generosity in London. Today we have similar tidings from Citadel, the hedge fund and trading group run by U.S. investor Ken Griffin.
Citadel's UK operations include Citadel Enterprise Europe (formerly known as Citadel Investment Group Europe), and Citadel Securities Europe. Citadel Enterprise Europe is all about investment management activities (ie. is a hedge fund). Citadel Securities Europe is all about the, 'technology-enabled liquidity division in equities and financial derivatives across various European exchanges and market-making in centrally cleared interest rate swaps.' In other words, it's a high frequency trading operation which both makes markets for clients and trades on its own accounts.
Both parts of Citadel probably pay well, but the generosity at Citadel Enterprise Group is quantifiable. In 2017, Citadel Enterprise Group employed 240 people and paid them a total of £130m excluding employer's national insurance. That's an average of £542k ($712k) per head. At Citadel Securities Europe around £48m was spent on staff costs last year, but because staff were seconded across from Citadel Enterprise Group, it's impossible to discern how many were employed and therefore how the £48m in allocated pay was distributed.
Citadel's European operation has been hiring, and it's been particularly hiring technologists. Last year, Citadel Enterprise Group added 26 people to its IT and administrative staff in London, an increase of 30% on staff numbers in 2016. It also added 18 investment management staff, an increase of 16%. At the end of the year, Citadel Enterprise Europe employed 128 investment managers and 112 IT and support staff in London.
All that hiring helped erode the company's profit margin. In 2016, Citadel made £57m in profits on £155m in revenues. In 2017, Citadel made £59m in profits on £187 in revenues. Citadel Enterprise Group blamed its "investment" in headcount for the failure for increased revenues to feed through to the bottom line.
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