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Morning Coffee: The Goldman Sachs trader who left for Millennium but might rather be at Citadel. The trouble with delayed gratification

When Anthony Dewell, a then 38-year-old star Goldman Sachs commodities trader left for hedge fund Millennium in October 2022, it was probably for a lot of money. Dewell was likely part of the commodities cohort at Goldman Sachs who was said to have earned $30m bonuses the previous year, and Millennium has a justifiable reputation for lavish pay. 

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Less than two years later, though, it's possible that Dewell may be having some regrets. Bloomberg suggests that Millennium's drawdown system for preventing losses, whereby managers who've exceeded their risk limit are asked to promptly close out trades even if they might (eventually) come good, makes it difficult to make big profits from commodities trades there. Millennium hasn't commented, but its founder, Izzy Englander, allegedly wants to increase the fund's $600m in commodities trading profits without ramping up the risk. 

It's allegedly not like this at rival hedge fund Citadel, which made $4bn in commodities profits last year. There, head of commodities Sebastian Barrack and founder Ken Griffin are reportedly more comfortable with commodities risk taking as long as a position is "strongly researched and well reasoned." “At Citadel, it matters if you’re eventually right. At Millennium, you better be right before you’re wrong,” one senior energy trader told Bloomberg.

Bloomberg suggests that this is not making Dewell's new life easy. He's allegedly also not being helped by Millennium's lack of a physical commodities trading business (Citadel has one), but he can at least take consolation in the fact that he's not alone. - Commodities trader are understood to have left Mike Platt's BlueCrest for a similar reason. And traders often seem to leave Eisler after disputes with deputy CIO Sam Wisnia about their capital allocations and drawdown limits. Millennium isn't Citadel, but it could probably be worse. 

Separately, whether you're saving all your money for a rainy day or just waiting for your bonuses to vest, it may be bad for your psyche. 

The Wall Street Journal reports that delayed gratification has the disadvantage of triggering a "specialness spiral," whereby the non-instantly-consumed item attains an air of specialness which it cannot live up to, thereby destining the eventual consumer for disappointment. 

"When specialness spirals take hold, not only are we waiting and waiting for an occasion that may never arise, but we are also accumulating clutter. Eventually, this can turn into hoarding," says the Journal. You have been warned. 

Meanwhile...

"I was actually having lunch with a former Point72 PM. And his biggest drawdown was $90 million. Which is, by the way, not crazy high. If you are down half a billion dollars, you are literally losing your marbles. Okay? You know, your face looks different." (Bloomberg) 

Jain Global wants to be like Citadel and is pushing into the commodities market. It's been hiring from commodities trading houses. (Bloomberg) 

JPMorgan spoke about the wellbeing of junior bankers at its investor day. "There is nothing, nothing that is more important than the health and well-being of our employees, and we're aware of those stories and they are tragic and incredibly sad," Jennifer Piepszak, co-CEO of the commercial and investment bank at JPMorgan, told investors. (Reuters)

There have been $11.3 billion worth of equity deals excluding IPOs in London so far in 2024, a jump of almost 24% on a year earlier, and more than in European centres. However, companies raised £39.2 billion pounds in London in 2021, before a 61% slump in 2023. (Bloomberg) 

British stockbrokers are struggling and now financial adviser WH Ireland Group Plc is in talks to sell its capital markets division to British investment bank Zeus Capital. (Bloomberg) 

JPMorgan expects its investment banking fees to rise by a mid-teens percentage increase in Q2. Markets fees are expected to rise in the "mid-single digits." (Bloomberg) 

Jamie Dimon will be retiring in less than five years' time. (Bloomberg)

Computer science graduates have spiralled and jobs have not. “When I tell people I’m in computer science, they’re, like, ‘Lucky you. You’re going to make a lot of money. You can do anything you want. The truth is, when you start looking right now, it’s impossible to get hired.” (WSJ) 

US firm Quinn Emanuel lifted London rates for newly qualified lawyers by 18% to £180,000. UK firms Linklaters and Freshfields Bruckhaus Deringer increased pay 20% to £150,000. (Financial Times) 

Funds are rushing into Abu Dhabi. Total assets under management rose 211% during the first quarter from the same three-month period the year before. New entrants include entrants Rajiv Jain’s GQG Partners and fund administrator giant SS&C Technologies Holdings. (Bloomberg) 

Starwood Group, a $10bn commercial real estate fund has had $1.3bn in withdrawal requests but satisfied less than $500m of them. (WSJ) 

London insurance jobs are booming. Headcount at London’s commercial insurance and reinsurance companies reached 59,000 in 2023, up from 41,000 in pandemic-hit 2021 and the highest figure in data going back to 2013. (Financial Times) 

Fund manager David Coombs dropped out of A levels and thought he'd work in a garage. “There were no professionals [in finance] in my family or the people I grew up with. They were plumbers, carpenters and teachers." (Financial News) 

If you start your day at 5am while everyone else is asleep, you will get more done. (WSJ) 

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AUTHORSarah Butcher Global Editor

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