Central risk desks are a good place to work. As we reported last year, the desks – which centralize the execution of trades and hedges across the bank – are about as close as you can get to proprietary trading in U.S. institutions these days. The process is highly quantitative and typically involves algorithms, but human traders also play a part and those humans are hot. It’s unfortunate, therefore, that one of Citi’s most senior central risk traders is understood to have left the bank.
Citi insiders say Dariusz Kowalewski, a senior quant in Citi’s equities division who was working on the central risk book, quit a few weeks ago. Kowalewski’s destination is unclear. He’s not thought to have spent long at Citi and joined after a career that spanned Barclays, Citadel, Getco and Knight Capital Group. Neither Kowalewski nor Citi responded to a request for comment.
Kowalewski’s disappearance comparatively close to bonus time comes as various banks are said to be building their central risk desks in London. Both Credit Suisse and Jefferies are understood to be looking to add to central risk teams and UBS is said to be hiring following the exit of its central risk head Paul Jefferys to Citadel in April and his replacement by Ryan Gould, a managing director at Citi, in May.
Central risk traders are often highly quantitative: Jefferys famously achieved 10 A grades at A level in 2004. Jobs in the area can be highly lucrative. In August, the head of one central book in London told us he works 50 hours a week and earns £180 ($236) an hour.
However, central risk teams are also said by insiders to be in a state of disarray. “A lot of banks are building in central risk, but none of them are clear about the kinds of people they want to hire – central risk desks tend to recruit people with a quantitative slant, but they’re often quite junior,” says one recruiter. He adds that central risk desks also have to deal with resistance from old school traders who feel threatened by the new highly quantitative traders who are intervening in their trades.
For this reason, some top quant traders in central risk teams decide working for a bank is just too much of a headache. Why work in banking when you could have a less politicized job with a hedge fund instead?