Bloomberg Interview



We were recently contacted by Bloomberg to talk about the trend of rates traders moving to hedge funds: 

The upending of Japan’s government bond markets after almost a decade of predictability has sparked a flow of rates traders from banks to hedge funds offering the prospect of much higher pay.

More than a dozen have left firms including Morgan Stanley and Citigroup Inc. over the last 18 months as the Bank of Japan’s unwinding of monetary stimulus creates the volatility needed to make money from trading, according to people familiar with the matter.

Several more departures are likely in the next few months, the people said, who asked not to be identified discussing private information. Investment banks typically pay out around 3% of profit that a trader generates as bonus, said Yoshiki Kumazawa, a director at search firm Morgan McKinley. It can rise to around 20% for hedge funds, although the figure varies greatly among them, he said.

That’s reshaping a market that numbers only around a hundred traders in total at big banks, by some estimates. Billionaire Michael Platt’s BlueCrest Capital Management and UK-based Capula Investment Management have been among the most aggressive hirers, the people said. Izzy Englander’s Millennium Management and Singapore hedge fund Dymon Asia Capital have also picked up multiple recruits.

“Banks have lost a lot of traders to hedge funds,” said Alistair Ramsbottom, a manager at Tokyo-based financial recruiting firm Divine Solutions Japan. “All the funds are on the look out. As soon as someone comes up, they want to meet.”

The development underscores how rates traders in Japan are in high demand after years in the doldrums. The nation’s central bank set a limit on 10-year Japanese government bond yields in 2016 in a bid to revive a stagnating economy. A byproduct of maintaining its vice-like grip on the market was that it left little chance for traders to profit from price movements.