Morning Coffee: Jane Street, the strange place, where intelligent people are paid obscenely. The worst place to be a junior
As we have noted here before, Jane Street has its foibles: in an industry obsessed with imposing non-competes on leavers, it never uses them; its systems are built in OCAML, an obscure coding language; its interview questions are unusually hard.
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The idiosyncrasies go deeper, however. In an article today, the Financial Times notes that OCAML isn't described as an "anarchist commune" for nothing: it takes innovative communality to extremes.
At Jane Street, there is no CEO and hierarchies are minimized. The FT says the company is run by management and risk committees. However, some people seem more equal than the rest: Jane Street has 2,631 employees, of whom 40 own $24bn of its equity. These 40 equity owners aren't called managing directors, but they effectively are that: they run each of Jane Street's trading desks and business units.
Jane Street is egalitarian, nonetheless. When you work for Jane Street, the FT says you're not paid according to the profits you generate, or even to the profits of your desk. You're paid according to the profits of the collective.
This doesn't mean you'll be paid badly. Jane Street's UK accounts indicate that it pays an average of around £700k ($917k) a head. Half its UK employees are traders, with the rest split between technology and infrastructure. Even interns at Jane Street are earning over $23k a month. "The amount of money they make is almost obscene," one observer tells the FT.
If you think this sounds appealing, the good news is that Jane Street is pushing into an increasingly broad range of markets and is hiring as it does so. Unfortunately, though, recruitment seems to have slowed. In a comparatively short (but unspecified) period of time to September 2023, Jane Street went from 2,000 to 2,500 people. Since then, it's added only 131 more.
As Jane Street penetrates new markets (eg. commodities and power trading), it therefore seems to be automating rather than recruiting. However, if you have a markets background, can conquer Jane Street's arcane interview process, and are comfortable in its commune, Jane Street may be interested in your skills. The Financial Times notes that unlike Jump Trading and other high frequency trading firms, Jane Street isn't only focused on speed: it sometimes holds positions for days or weeks. It needs technologists, but it also needs traders. Its traders just need to be fine with working in jeans and t-shirts and having pay disassociated from personal profitability.
Separately, the death of a young accountant at EY in India last month has highlighted the extent to which the life of juniors on the subcontinent can be even more demanding than in London or New York.
The Times notes that 26-year-old Anna Sebastian Perayil, who died of a heart attack in September, isn't the only recent death in India, where overworked juniors have also taken their own lives after complaining of stress at work.
While the Times focuses on consultants and accountants, banks have long outsourced pitchbooks and other elements of their processes to India too.“These firms walk the talk when it comes to employee wellbeing in the West, but when they get here, it all gets thrown out of the window in favour of the bottom line,” one consultant at the Big Four says. The complaints of working days that end at 2am are strangely familiar.
Meanwhile...
Peter McGarry, a senior portfolio manager at Garda Capital Partners in Switzerland, made more than $100m in profit in 2020 and is described as an intense character with a sense of social purpose. He's been investing some of his money in migrant housing in Ireland and has become vilified by the local anti-immigration lobby. (Bloomberg)
PwC’s new UK chief has launched an overhaul of its operations in the country, which will involve creating a standalone technology and artificial intelligence unit, in a move that bosses acknowledged could be “unsettling” for staff. (Financial Times)
Marc Rowan, the new head of Apollo says difficult markets are the ideal time to build a career. “You want chaos, you want everything shaken up, you want the system to be brought down and rebuilt again. This is a time of incredible opportunity.” (Financial Times)
Students are suffering from extreme anxiety. "Some of my students tell me they find even getting on a bus to come to classes overwhelming. Many get socially anxious being around other people, so avoid seminars. Some won’t speak in class and others don’t come in because of panic attacks." (The Times)
Andrew Bailey, the governor of the Bank of England, is now on TikTok. (TikTok)
Banks are all about leveraged loans, again. Lenders can provide leverage “levels of 7.0x and in excess of that, something that wouldn’t have been conceivable 12-18 months ago.” (Bloomberg)
Jamie Dimon did not endorse Donald Trump as president. (Bloomberg)
The drug taking in Industry is not an accurate portrayal of life in banking. “I didn’t see much of that happening around me when I was in banking. I mean in the late 90s and early 2000s I heard the odd story, and maybe it happens more in outfits like brokerage houses, where they do lots of entertaining of clients, where the governance is not as strict.” (Guardian)
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