In theory, investment banks’ traders are looking for alternative career paths. Hedge funds are the obvious outlets and high frequency trading firms, despite their relatively small size, are reportedly eagerly hiring traders and quants from the sell-side.
As we’ve pointed out previously, it’s not all one-way traffic and a number of hedge fund portfolio managers who left investment banking for the buy-side have returned in recent months. The same can be said about the supposed exodus to HFT firms.
Nomura has just hired Simon Harris as a managing director and head of European single stock flow trading just over a year after he joined HFT firm Maven Securities, according to sources close to the situation. He was previously a senior portfolio manager overseeing the firm’s US equity volatility profile.
Harris's move back into banking follows a mere 15-month stint in high frequency trading. He joined Maven in April 2013 after seven years at Credit Suisse in London, latterly as head of European single stock flow trading. Before joining Credit Suisse, Harris spent over four years working as a senior trader for Chicago-based hedge fund Peak 6 Investments.
Thanks to Michael Lewis’s book Flashboys, high frequency trading has been under a lot more scrutiny over the past few months. The huge pay packets on offer were the stuff of legend a few years ago – in 2009, Sergey Aleynikov, a developer who was prosecuted by Goldman Sachs for allegedly stealing proprietary code, was supposedly offered a $1m to move across to Teza Technologies and that was after only two years’ experience in financial services.
Despite the regulatory crackdown on pay in investment banks, Harris would likely have received a large package at Credit Suisse. However, it’s worth noting that HFT firms supposedly offer $249-291k to people with just two years’ experience, so they are likely to offer much more handsome salaries to their senior staff.
Maven's latest accounts on Companies House for the year to June 2013 suggest it paid eight London-based employees £1.47m, or an average of £184.8k. Its highest paid director received £732k.
Harris’s return to investment banking comes at a time when banks’ trading desks are being scaled back because the Volcker rule is squeezing institutions’ capital intensive businesses. Traders are instead finding refuge in HFT trading firms, according to research by recruiters Astbury Marsden.
“The pressure that investment banks are under from regulators and shareholders to reduce their risk taking in capital markets means that the movement of personnel from the investment banks to the specialist HFT and other trading firms will continue,” Jon Gilbert, head of the technology and quant practice at Astbury Marsden said in a statement.
Nomura declined to comment on the appointment.
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An unlikely refuge for senior traders and bankers