Hedge Funds Raid BNP’s Shuttered Prop Desk Amid Talent Race

(Bloomberg) -- BNP Paribas SA’s closure of its proprietary-trading desk has triggered a hiring frenzy for the world’s biggest hedge funds.

Citadel has recruited Mathieu Gaveau, who was head of rates at BNP’s Opera Trading Capital division until it was shut down in January. Paolo Nicolosi, a senior foreign-exchange trader at the unit, has joined Brevan Howard Asset Management, while some of their colleagues have started roles at Capstone Investment Advisors, Capula Investment Management, Eisler Capital and H2O Asset Management.

The world’s hedge funds are in a race to lure and retain the most experienced money managers as they struggle to profit from calm markets and dovish central bank policies. The shuttering of Opera, a walled-off entity within Paris-based BNP where a team of senior traders used billions of euros of shareholders’ funds for market wagers, presents a rare opportunity, headhunters said.

“Something like the closure of Opera creates that diaspora of individuals who suddenly find themselves available,” said Canice Hogan, who runs financial-services recruitment firm Shadowhound Ltd. “And there’s constant demand from the hedge funds for good traders with track records.”

Hiring Drive

Gaveau, a senior trader at BNP and Opera since 2003, will join Citadel’s macro strategies business, which the Chicago-based firm started last year for wagers on global economic trends, a spokeswoman said. Nicolosi, who made bets on currencies at the French bank for more than a decade, will join Brevan Howard’s Alpha Strategies Master Fund.

Nicolas Hessel, who made complex stock wagers for Opera, has joined London-based Capula, while convertible-bond trader Sekhar Venkatraman has started at H2O, according to filings at the U.K. Financial Conduct Authority. Colleagues Adrien Delattre and Christian Chabanel have been hired by Eisler Capital and Capstone respectively, according to filings and LinkedIn profiles.

The traders declined to comment. Spokespeople for BNP, Capstone, H2O and Capula didn’t comment. Eisler did not respond to requests for comment.

Opera traders used BNP’s funds and borrowed money for speculative market bets, a risky strategy known as proprietary trading -- or prop, for short -- that’s akin to how a hedge fund operates. The division struggled to make money in 2018 as bouts of volatility whipsawed traders and BNP executives moved to shut it down in January. Opera had 16 employees across Paris, London and Hong Kong, filings show.

Meanwhile, hedge funds are raiding banks and rival firms to scoop up seasoned traders who can help them weather a punishing period, recruiters said. The firms, which manage about $3 trillion globally, lost almost 5 percent last year, their worst performance since 2011. Investors have yanked $116.4 billion from the industry since the beginning of 2016, the most since the aftermath of the financial crisis, according to Hedge Fund Research Inc.

“Competition now is tougher than ever to hire portfolio managers with meaningful track records,’’ said Zack White, a partner at headhunting firm Attica Executives. “In order to lure experienced PMs, the platforms are having to put together more competitive packages than ever.’’

Hedge Funds Raid BNP’s Shuttered Prop Desk Amid Talent Race

Multi-manager hedge funds such as Citadel, which employ dozens of small teams of traders to manage money independently of one another, are at the forefront in the talent race as they cater to new investors. Citadel has hired from firms such as Citigroup Inc. and Point72 Asset Management this year.

Sometimes, the battle for talent ends up in the lawyers’ hands. Schonfeld Strategic Advisors sought an injunction preventing rival ExodusPoint Capital from pursuing its employees, but that bid failed in New York state court last month.

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