Morning Coffee: Peculiar behaviour at quant hedge fund people love to work for. The hardest working developer in finance
When employees at quant hedge funds and trading firms fall out with employers, it's usually for one reason: stealing, or allegedly stealing code. It's usually not because they have willfully tampered with the firm's quant trading models, generating potentially losses for some clients.
And yet, this is what Bloomberg says has gone on at Two Sigma, the quant hedge fund known for its generous pay and lavish array of perks, including 'hackerlabs' filled with things like oscilloscopes and electronic components to allow employees to build things IRL. In the words of one hedge fund headhunter, Two Sigma, along with Jane Street, is the place quants most want to work: "It's one of the best cultures out there, the dream team," he says.
So why intentionally upset things? Two Sigma declined to comment to Bloomberg. However, writing in its Friday investor letter, the firm said: “One of our researchers engaged in intentional misconduct by circumventing our modeling practices,” suggesting it was a sin of intentional omission rather than intentional action. Two Sigma added that remedial action of its own will be taken if it transpires that a fund suffered losses as a result of the misconduct.
The employee responsible for sidestepping the Two Sigma modelling method is presumably already on leave. The quant world is alight with speculation about his identity, with some suggesting the alleged perpetrator earned over $20m in compensation last year. The events are not thought to be related to the dispute between two Sigma's founders, David Siegel and John Overdeck.
Separately, however hard analysts work in investment banks, they may not work as hard as Gary Wang, the ex-best friend of Sam Bankman-Fried who has been testifying against his old companion at Bankman-Fried's criminal fraud and conspiracy trial.
Wang was the workhorse of FTX, says Bloomberg. He worked so hard that colleagues feared he would burn out, and was so sleep-deprived that no one was allowed to wake him at night to fix problems with the site. This reputation appears to have earned him the right to work from home in a luxury penthouse and speak to almost no one.
Unfortunately, the reclusive workaholic Wang has now been dragged into the light. Speaking last week at the trial, he said he was testifying against his old friend because it was the right thing to do, and because he wanted to avoid prison, where privacy is hard to come by.
Ernst & Young asked JPMorgan to buy Metro Bank, but JPMorgan said no. (Bloomberg)
Robey Warshaw is also acting on behalf of Metro Bank. Regulators have approached Santander, NatWest Group Plc and Lloyds Banking Group Plc to rescue Metro Bank too. (Sky)
Citadel's Wellington Fund returned 12.6% this year. DE Shaw's composite fund returned 8.7%. Millennium returned 7.6%. (Business Insider)
Millennium's Izzy Englander bought a circa $105m hilltop mansion in the south of France that previously belonged to a co-founder of Microsoft. (RobReport)
Millennium is hiring Dan Friedman from Diameter to run its credit and mortgage trading business. Friedman, who formerly worked for Goldman Sachs, will be reunited with Anthony Dewell, who also formerly worked for Goldman Sachs. (Bloomberg on Xwitter)
Schonfeld first had informal talks with Millennium about a potential tie-up before 2020. Those talks are now advancing because after hiring portfolio managers on very large sign-on bonuses, Schonfeld has increased costs and failed to generate returns to justify it. (Financial Times)
There have been suggestions that Jim Esposito, who co-heads banking and markets, and Marc Nachmann, the asset and wealth management chief, will become co-heads of Goldman Sachs. Vontobel implemented a similar set-up last week. (Financial Times)
David Solomon threw another party at his Soho loft and invited 100 people, including Lloyd Blankfein. (NY Post)
Sam Bankman Fried allegedly gave $10m to his father, which is being used to fund his defence, and $35m to his brother, to fund a pandemic preparedness charity. (Bloomberg)
City broker Panmure Gordon has posted a loss of £16.3m. (Financial News)
Among friends my age, the first couple I know to have a child — and one of the only couples I know to have a second child — were both bankers. (The Times)
Go easy on the cougars."People stared with an impudence that verged on stupefaction, as if witnessing a union that defied the order of nature.” (WSJ)
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