Morgan Stanley Traders Join Hedge Funds Amidst Job Cuts – Global Banking News, Jersey

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Morgan Stanley Traders Join Hedge Funds Amidst Job Cuts

Two senior traders from Morgan Stanley have recently made the decision to pursue opportunities in the hedge fund sector, joining prominent firms Millennium and Citadel. The move comes amidst job cuts at Morgan Stanley, where the bank announced 3,000 job reductions earlier this year.

Chris Rivelli, who served as Morgan Stanley’s head of EMEA FX derivatives and global exotics trading in London, will be joining Millennium as a macro portfolio manager in St. Helier, Jersey. Meanwhile, Ben Levine, a managing director in the New York derivatives structuring team, will be leading Citadel’s risk transfer solutions team in New York.

It is worth noting that both traders’ decisions to leave Morgan Stanley are unlikely to be related to the job cuts the bank has implemented. While Morgan Stanley has not disclosed specific headcount reductions within individual divisions, its investment bank reported an increase in total compensation spending by 8%.

This move towards hedge funds can be attributed to the attractive compensation packages they offer compared to banks. Bank traders typically receive around 5% of the profits they generate as a bonus, while hedge funds tend to offer bonuses in the range of 10-15%.

Millennium, in particular, has been expanding its workforce in London, with headcount increasing from 566 in 2021 to 765 in 2022. The hedge fund paid an average of £1.1 million ($1.3 million) per employee in London last year.

In addition to hiring traders, Millennium has also made strategic acquisitions, such as hiring a new head of AI from Bloomberg in New York and a JPMorgan tech managing director for their rates and macro technology division in London. The hedge fund recently partnered with Schonfeld, another prominent hedge fund, to manage a portion of its capital.

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This migration of traders to hedge funds reflects the shifting landscape within the financial industry and the allure of potentially higher compensation. It will be interesting to see the impact of these moves on Morgan Stanley and the performance of the traders in their new roles.

Morgan Stanley is set to announce its third-quarter results next week, following a decline in revenues and profits for its investment banking division in the first half of 2023. Despite the job cuts, the bank’s decision to increase compensation spending suggests its commitment to retaining top talent in the competitive trading industry.

As the financial sector continues to evolve, it is likely that we will witness more traders making similar moves, seeking opportunities that offer greater financial incentives and career prospects beyond traditional banking roles. This trend highlights the need for banks to reassess their compensation structures and adapt to the changing preferences and expectations of traders in order to retain their top performers.

Frequently Asked Questions (FAQs) Related to the Above News

Why did the senior traders from Morgan Stanley decide to pursue opportunities in the hedge fund sector?

The traders joined hedge funds for various reasons, but it can be attributed to the attractive compensation packages offered by hedge funds compared to banks. Hedge funds typically offer higher bonuses, ranging from 10-15% of the profits generated, while banks typically offer around 5%.

Were the traders' decisions to leave Morgan Stanley related to the job cuts at the bank?

No, it is unlikely that their decisions were directly related to the job cuts at Morgan Stanley. The bank announced 3,000 job reductions earlier this year, but the specific headcount reductions within individual divisions have not been disclosed. Furthermore, Morgan Stanley reported an 8% increase in total compensation spending, suggesting a commitment to retaining top talent.

Which hedge funds did the traders join?

Chris Rivelli joined Millennium as a macro portfolio manager in St. Helier, Jersey, while Ben Levine joined Citadel's risk transfer solutions team in New York.

How has Millennium been expanding its workforce?

Millennium has been expanding its workforce in London, increasing its headcount from 566 in 2021 to 765 in 2022. The hedge fund has also made strategic acquisitions, such as hiring a new head of AI from Bloomberg and a JPMorgan tech managing director.

What impact might this migration of traders to hedge funds have on Morgan Stanley?

The impact on Morgan Stanley remains to be seen. However, the bank's decision to increase compensation spending suggests its commitment to retaining top talent amidst the competitive trading industry.

When will Morgan Stanley announce its third-quarter results?

Morgan Stanley is set to announce its third-quarter results next week.

What has been the trend in the financial industry regarding traders seeking opportunities beyond traditional banking roles?

There has been a trend of traders seeking opportunities that offer greater financial incentives and career prospects beyond traditional banking roles. As the financial sector evolves, more traders are expected to make similar moves, prompting banks to reassess their compensation structures to retain top performers.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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