Morning Coffee: How AI is changing demand for developers at Citadel Securities. Bad news about the deal rebound
If you're an engineer looking for a software development job in finance, Citadel Securities is one of the more aspirational and highest paying places (alongside Jane Street) you could work for. But, being a brilliant software developer is no longer enough. As large language models and AI permeate financial services, the kinds of people Citadel Securities needs to work on its electronic trading platform is changing.
"The days of 'I'm a good programmer' are becoming numbered," Ken Griffin, Citadel Securities' founder, told the interns there this summer, according to Business Insider. Now that large language models can create code, it's less about translating problems into code than about solving problems themselves. Those problems can be ambiguous, and they often have commercial constraints.
Costas Bekas, a technologist who heads up Citadel Securities' research platform, told Business Insider that cloud platforms, for example, can be cumulatively expensive and that people need to be aware of this and to "become owners of what they do."
As developers increasingly rely upon AI to do coding work, Damien Neff, Citadel Securities's head of systematic trading technology, said it's simultaneously becoming more difficult to find people who can still do the really low level coding that's needed to interact with hardware and to process trades in the fastest possible way. AI means that technologists see things at a "high level" said Neff, and they're losing this really low level coding ability.
If you want to get a technology job at Citadel Securities in the age of AI, therefore, you either need to be excellent at solving problems in a commercial way, and communicating about that, or you need to be deep in the machine code weeds. The latter is probably harder to replicate. A previous generation of machine code veterans are nearing retirement - in 2019, Citadel hired Stuart Feldman, a veteran scientist from Bell Labs and creator of the first Fortran compiler, to advise its CEO on CTO on coding on the metal. Feldman is still there and by our reckoning he's approaching his 60s now.
Separately, if you were hoping that the recent spate of IPOs signalled a recovery in deals and an improvement in the investment banking jobs outlook, then bad luck. Bloomberg reports that war in the Middle East, surging treasury yields, and a series of underwhelming IPOs are all putting the brakes on the new issuance rebound. There's some expectation that the IPO window might reopen from March '24. In the meantime, the most excited people are in convertible debt, which should thrive in a world where rates are higher for longer.
Private equity firms are facing the worst year in a decade for selling portfolio companies. (Financial Times)
Nathan Clark, Virtu's former head of client technology, is trying to invalidate a non-compete that he says contains a “sweepingly overbroad” provision that allegedly bars him “from working for any financial firm anywhere in the world in any position whatsoever—even as a janitor—for three years.” (Bloomberg)
UBS started a new team called strategic insights and advisory, which will combine the teams of its strategic insights group with a similar unit at Credit Suisse called corporate insights. (Financial News)
Revolut people have been giving the regulator negative feedback on their time there. Revolut says 80% of its exit interviews are positive. (Financial Times)
Wall Street bankers bought themselves holiday homes in Florida and the Rockies and spent the last few years working from home on Fridays and Mondays. They can't do that now they're required in the office. (NYPost)
Under basis trades, a hedge fund will sell Treasury futures and simultaneously buy the corresponding bonds. By buying cheaper bonds in one market and selling expensive ones in the other, traders can profit from the small price differences. However, the trades can be leveraged 50 times and if funding costs suddenly rise or Treasuries become volatile (as in the pandemic), hedge funds can be in trouble. It's causing regulators a headache. (Bloomberg)
42% of Americans think WhatsApp group chats are like a part-time job. (WSJ)
Luck is important to career success. Partners at y Combinator, a startup accelerator, encourage founders to apply to their programmes by talking about increasing the “surface area of luck”: putting yourself in situations. (Economist)
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