Hedge fund increases headcount by 20% after revenues slide by 30%

Arrowgrass Capital Management, the $3.5bn hedge fund set up by former Deutsche Bank bond traders, increased headcount in its London operation by over 20% last year, despite revenues tumbling by 28% over the course of the year.

Arrowgrass, which has just released its accounts for the year to 31 December 2016, had 95 employees in London at the end of last year – up from 79 in 2015. In another example of counter-cyclical hiring in hedge funds, it indulged in this recruitment despite posting revenues of £42.9m in 2016 – down from £60.4m for the previous 12 months.

The hedge fund has not been entirely loose with the purse strings, however. It paid its employees an average of £285.3k last year, down from £369.4k for the same period in 2015.

Arrowgrass also brought in more partners last year – it hired two senior staff to take its member headcount to 14. Again, though, pay was down – it spent £24.2m on its partners’ remuneration last year, down from £35.2m a year earlier. The highest paid member earned £13.7m, meaning the remaining 13 senior staff earned an average of £807.6k.

Arrowgrass hasn’t been indulging in a lot of recruitment so far this year, but has made some significant hires. Sumit Kendurkar, head of single stock flow dispersion for EMEA at UBS, joined as a portfolio manager in April.

Arrowgrass grew out of Deutsche Bank’s convertible bond franchise, which was set up in 1998. In 2004, the team was renamed DB Omnis and moved on to its own proprietary platform. This was later spun out into a separate entity, with Deutsche Bank claiming a stand-alone firm would have more trading flexibility.

Contact: pclarke@efinancialcareers.com

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