Morning Coffee: Hedge fund Millennium said to pay new hires $60m. How to handle a boss who emails at 2am
In investment banks there are lingering fears of layoffs in the style of the dotcom crash of 2001, but in hedge funds it's like 2006 all over again.
Fresh from the extravagant profits of the past few years, the New York Times reports that the big multistrategy hedge funds are paying huge amounts to hire both from banks and from rival funds.
While the NYT intimates that they're all at it, Millennium Management is the firm whose generosity is repeatedly called out. Last year, Millennium is said to have hired ex-RBS head of rates trading, Stefan Ericsson, from Citadel on a guaranteed package of $50m over several years. Millennium is disputing this number, but the NYT claims it's not unusual and that Millennium has offered other new hires guaranteed pay approaching $60m.
If this is true (and Millennium seems to be saying it's not), it helps explain why traders at banks keep joining Millennium and suggests that working as a trader in a bank and receiving 3% or less of PnL in a role where risk-taking is highly constrained, is for suckers. It would be why managing directors at Barclays and JPMorgan have been leaving for Millennium before bonuses have been paid.
Of course, not everyone earns the huge amounts. Millennium doesn't disclose pay numbers globally, but at its London office in 2021, average compensation for non-partners was £903k ($1.1m) per head. Partners were paid an average of £13m.
Separately, if your boss keeps emailing you at ungodly hours with semi-relevant requests, you might want to set up a filter. Khe Hy, the former Blackrock MD who left the industry aged 35, and who now runs an online education company, says this is what he did.
Hy tells the Wall Street Journal that when he worked in finance, a third of the emails one boss sent were effectively asking things like, “Can you send me the link for the fantasy-football login?” or “What was the name of that restaurant in New York City, again?"
Hy liberated himself from some of these requests by adding a filter to his emails which extracted only the emails that were sent to him personally and not the emails he was cced into. He read the personal emails first and saved the rest until a more appropriate hour.
Meanwhile...
Rothschild might recruit less or stop hiring altogether. . “We’re expecting our businesses to continue to perform well but below 2022 levels, linked to a slowdown in mergers and acquisitions in a very uncertain macroeconomic climate. It’s always hard to see more than six months ahead in this sector but the first semester will be weaker.” (Financial Times)
The average worker is spending $4,661 less per year on meals, shopping and entertainment near their offices in New York. (Bloomberg)
Yes, Goldman Sachs, JPMorgan and Morgan Stanley are all thinking of eliminating their role-related allowances in London. “People have grown used to these payments. They are not guaranteed, but it is a very rare event if you miss an instalment. Bonuses can be bigger if the cap is lifted, but this year showed that banks can be quite ruthless in bad years.” (Financial News)
If you want to earn big money after an MBA, go to Stanford Business School. The average weighted alumni salary is $248,669. (Finanical Times)
Now law firms are cutting headcount too. “The work has fallen off a cliff. The firms that were really red hot and significantly over-hired are the first movers to lay people off.” (Financial News)
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