Where do ex-bank traders go when they’re fed up with large supranational institutions? Try BlueCrest, the big bond fund which has branched out into equities and keeps hiring traders from banks.
Everyone knows successful hedge funds pay well. BlueCrest founder Michael Platt earned around $125m last year, but Bloomberg has unearthed another string to the BlueCrest compensation bow: partners there are compelled to reinvest their deferred bonuses into a giant internal fund, which can help multiply their earnings long term. Known as ‘BlueCrest Staff Managed Account’ or BSMA, this fund is currently worth more than $2bn and invests both in BlueCrest’s own strategies and in ‘external strategies.’ It’s seen as a staff retention mechanism and is designed to help keep hold of BlueCrest’s partners, of whom there are currently 134.
So-called ‘co-investment’, or betting alongside a fund’s investors, is nothing new in the hedge fund industry, but BlueCrest’s BSMA is raising eyebrows because it seemingly allows staff to pit their wits against its investors as well as alongside them. It should also raise eyebrows because it shows that hedge funds do defer a large proportion of senior staff pay – but that unlike most banks, this deferred pay is put to good use and can be expected to multiply. BlueCrest employees only get their money back when they retire.
Separately, Jamie Dimon has revealed what keeps him awake at night. Among other things, it’s Wells Fargo. “My operating assumption has always been and always will be that we are going to have huge, tough competition from Goldman Sachs and Wells Fargo to some new entrants,” Dimon reportedly said. “Wells Fargo will be in our business. I have enormous respect for them.”
Well, guess what? Wells Fargo Securities is hiring in London. Our research shows that it’s increased its regulated staff by 27% in The City over the past 12 months (from 78 to 99) and it’s still hiring now. Wells Fargo Securities is currently advertising for everything from a director-level high yield trader to an M&A analyst for its London office. Now could be the time to join a business that Jamie Dimon rates very highly.
Jamie Dimon said trading revenues are down around 15% so far this year compared to the same period of 2013. (Bloomberg)
Morgan Stanley gave employees $2.72 billion in deferred awards for 2013 performance. (Bloomberg)
Suneel Kamlani, the co-chief executive of RBS’s markets business, who joined in 2010 from UBS, is leaving. (Sky)
Labour MPs don’t want RBS to pay any bonuses whatsoever. (Financial Times)
Credit Suisse shares fell 3% yesterday on revelations that the bank helped US citizens evade tax. (Financial Times)
Hector Sants is in with Kate Middleton and the Oxford set. (Financial News)
Now that El-Erian has left, are Pimco’s trillions effectively under the sole charge of a monomaniac? (Felix Salmon)