Morning Coffee: Hedge funds are demanding awkward information in return for highest pay. Barclays' back to the office thrust is quite limp

Traders and portfolio manages are just like the rest of us – they have pride and shame, and they like to present themselves as successful.  So if you ask one of them about their recent performance, you’ll get a sort of edited highlights, with all the dumb trades they made left out, and quite possible a few smart trades that they didn’t make inserted into the historical record. Even without any intention to deceive, memory can be a surprisingly unreliable record.

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That’s why, ideally, anyone hiring for a multistrategy fund would prefer to get some sort of hard evidence to back up the candidate’s claims of an outstanding P&L.  But unfortunately, Business Insider reports that it’s not as simple as that.  Hedge fund returns are confidential and proprietary data.  The returns of individual pods in a multistrat (which are not usually reported to investors) are even more confidential.  Hedge funds are also very sensitive. They know that recruitment is a channel by which information can leak out into the world, and prepared to get quite aggressive legally to prevent it. 

Given this delicate situation, traders and recruiters often tend to do what traders and recruiters often tend to do – to push right up to the limits of what’s legal and professional, and then perhaps push a little more.  On an anonymous basis, some people involved in multistrat hiring have confessed to taking mobile phone screenshots, or pointing their phone at their trading screen on a videocall, or even taking a laptop to a coffee shop meeting on one of their work-from-home days to record the P&L of a potential hire.  Random envelopes drop into mailboxes with no identifying information or return address, just a few internal performance reports. (There are also stories of candidates faking P&L reports on headed notepaper, which might partly explain the lengths people go to).

You might think that hedge fund compensation is correlated with performance, so if someone’s claiming that they made a huge P&L, ask for evidence of the consequent huge bonus.  And yet there are snags there too – in New York and California, it’s illegal to ask questions about previous remuneration in a job interview, so some recruiters have apparently been reduced to repeatedly saying “if only there were some evidence you could show us …” to candidates who were slow on the uptake.  And, of course, payslips will only tell you about past years – not the current year P&L which is usually the basis of the salary negotiations.

This perhaps sheds some interesting light on the determination of some big multistrat funds to get everyone back in the office.  It's much easier to sneak away to a job interview when you're working remotely. 

Elsewhere, the Financial Times says Barclays has … sort of...joined the back to office trend. But it’s still one of the more generous employers on the Street, as the new policy moves the minimum requirement from two days a week to three.

This appears to be more aimed at back- and mid-office personnel than investment bankers – “people familiar with the matter” pointed out that customer-facing staff have been five days a week for a while.

Which reflects the reality of banking; no matter how generous the official policy is, for anyone with a front office career who values it, there has always been an implicit “clients and your MD permitting” clause in every bank.  

Barclays technology staff are among those affected by the new three-day mandate. It doesn't seem popular, particularly as it's been combined with a round of job cuts. 

Meanwhile …

Deutsche Bank traders had a great quarter but costs were up. The bank plans to cut management costs this year. (Bloomberg) 

Jefferies is still staffing up in anticipation of a boom in EMEA deals.  After Arnaud Collet arrived from Citigroup, its leveraged financed team have now welcomed Tim Kerry from Barclays. (Bloomberg)

The London mid-size investment banking market might not be quite as bad as it was this time last year, but there is still a lot more consolidation to go through, and structural issues with respect to the brokerage-only model, according to Berenberg’s David Mortlock. (Financial News)

There are only a few times in a trading career when you get the chance to light an imaginary cigar and say “I love it when a plan comes together”, so we hope whoever it was took a position in Treasury futures just before the Fed statement and made a profit of $4.6m in ten minutes took full advantage. (Bloomberg)

Once upon a time, Soho House excluded bankers from membership because they weren’t cool enough. What goes around comes around – now they’re having to defend against activist investor Dan Loeb. (WSJ)

Coinbase has hired William Dudley, former President of the New York Fed, and Donald Trump’s campaign manager as advisors, saying that “the crypto industry deserves better”. (Bloomberg)

“Former hedge fund analyst who now runs two boutique hotels and a philanthropic foundation” is pretty clearly the description of someone quite posh.  But in fact Yuvraj Yeshwant Holkar is not just “quite posh”; he’s the heir of the maharajahs of Indore state. (GQ India)

Photo by Chris Yang on Unsplash

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