Morning Coffee: Jane Street's Hong Kong office hires student on US$500k amid growth. Ex-JPMorgan analyst's $500m+ company

Which is more exciting? Is it the fact that electronic market maker and proprietary trading firm Jane Street has generated $14bn of net trading revenue in the first nine months of the year, according to Bloomberg. Or is it the fact that Jane Street has offered an Indian graduate a starting salary of US$508k to work for it as a quant trader in Hong Kong? 

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The two things are not unrelated. In the first half of 2024, Jane Street's 2,631 employees each generated average revenues of $3.2m and average profits of $2.3m. Jane Street can afford to pay. There's a reason it tops our list of Ideal Employers by compensation. Even Citadel Securities 'only' generated earnings per head of $1.7m over the same period. 

How does Jane Street do it? The Financial Times said in September that Jane Street is less of a pure technology driven market maker than firms like Citadel Securities and Jump Trading, and that it will sometimes hold positions for "weeks and days". Founded in 2000 Jane Street made its name trading ETFs, but has branched out is moving deeper into areas like government bond and currency trading. This diversification seems to be working.

As it grows, Jane Street needs talent. It likes to hire people at the start of their careers and to train them up. The Indian student at IIT Madras reportedly interned at Jane Street in Hong Kong last summer and is now joining Jane Street full-time. His/her pay package is over twice as high as that offered to the next most highly paid IIT graduate, and four times higher than that offered to IIT students joining other niche trading firms. 

It's not unusual for Jane Street to pay student hires generously: recently graduated engineers there get $325k. The $500k package for the IIT trader reportedly includes salary, bonus and relocation costs. The bigger Jane Street becomes, the more frequent this will be.

Separately, if you can't make a lot of money immediately after graduating by joining Jane Street, you can maybe build a company worth $500m+ after a brief spell at JPMorgan.

Stephen Hunter studied law at the University of Bristol in the UK before working as an analyst in JPMorgan's leveraged finance team in London for two years. Then he skipped to the buy side for fourteen months. Then he went free-range and set up his own company, 9Fin. 9Fin sits at the zeitgeisty nexus of private credit and AI and 'uses artificial intelligence to automate the extraction and analysis of data relevant to bond pricing.' 

The Financial Times reports that 9Fin now has 250 employees and is worth in excess of $500m. It's just raised $50m in financing. Hunter is saying things like, "There is at least a billion-dollar revenue business to be built in this space.” Maybe there are more lucrative things than Jane Street after all.

Meanwhile... 

Quant hedge fund Qube has been hiring stockpickers and wants 100 of them by next year. Engineers Gate and Squarepoint have been moving into discretionary investing too. (Business Insider) 

Citadel’s commodities business generated about $4 billion of profit this year, driven by natural gas trading. Happy times. (Bloomberg) 

Odey Asset Management, the holding company for the hedge fund run by Crispin Odey, has updated its principal activities to “hunting, trapping and related service activities”. (Financial News) 

The head of BNP Paribas in the UK: "Long hours are part of the job, but it cannot be all the time, 365 days a year. There needs to be downtime, where you can recuperate and we need to make sure that even if they are on because of a deal for a number of days, or weeks, if they feel it is too much for them, they should be able to talk about it.” (Financial News) 

Point72 has been hiring macro portfolio managers from Symmetry in Asia. (Bloomberg) 

Balyasny and Schonfeld are some of the best performing multistrategy hedge funds this year. Both benefitted from market moves after the US election. (Bloomberg) 

St. James's Place is cutting 500 jobs, but the 500 won't be financial advisors. (Bloomberg) 

3,400 professional workers were asked about their experiences of meetings. 35$ of meetings were deemed unproductive. People in Gen X — now in their forties and fifties — spoke too much; Gen Z barely spoke at all. (Financial Times) 

“I spent 15 good years on Wall Street and other places. It’s a cover-up. It’s window dressing. None of these performance improvement plans lead to improving performance.” (WSJ) 

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