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Jane Street's gigantic revenues per head look a lot larger than Milllennium's

Millennium, the world's largest multistrategy hedge fund, has a good lawyer. 

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Andrew Levander, a New York partner specializing in white collar litigation at Decherts, last week complained that Jane Street hadn't identified the secret trading strategy which it says two of its former young traders are currently using illicitly at his client - Millennium. This being so, Levander asked Jane Street to submit details of the secret strategy. In an earlier hearing, Levander also let it be known that the strategy has something to do with options trading in India.

Jane Street has since unexpectedly withdrawn its demands for a preliminary and permanent injunction against Millennium's use of its mystery secrets, whilst simultaneously arguing that Millennium's demand for "particularized disclosures of every aspect of every trade secret at issue in this case," is unfair. If Levander's strategy was to force Jane Street to back off for fear that its secret strategy would become known to everyone in the course of the case, it seems to have worked. 

However, in one dimension at least, Jane Street can still retain a sense that it has the upper hand over Millennium. It's people look far mroe productive. 

Having had sight of Jane Street's prospectus for its imminent debt issue, FT Alphaville says Jane Street employed 482 traders last year and that they generated $15.8bn in revenues. Revenues per head for 'front office' staff at the trading firm are therefore...$33m.

How does compare to Millennium? We can't say for sure at a global level; nor can we say for sure in 2023. But in the UK, in 2022, accounts filed for Millennium Capital Management Ltd, revealed that the hedge fund employed 425 "professional" [investment?] staff in the UK, and generated £1.5bn ($2bn) in revenues. The implication, then, is that the average front office person at Millennium (in the UK) generated....$4.7m in revenues in 2022. 

This is seven times lower than the revenues generated by a trader at Jane Street last year....

It's also lower than the $5.5m per head which intelligence firm Coalition says investment banks' front office fixed income salespeople and traders generated in 2023 (although it is higher than the $3.6m Coalition says individual equities sales people and traders generated in banks). 🤯 

Millennium declined to comment for this article, but might well object that a) our figures are two years out of date, b) that they only apply to the UK, c) that its 'professional staff' are more than just traders and portfolio managers, d) that's it a hedge fund whereas Jane Street is an electronic market making firm, and they're in a different business.

Nonetheless, it does look like Jane Street is a peculiarly productive anomaly when it comes to front office staff. Jane Street can at least take consolation in that.

Why, then, are Jane Street's traders so productive? It's partly because they are vastly outnumbered by the technology professionals who build Jane Street's systems. At Jane Street, the FT says only 18% of people are traders. At Millennium (in the UK, in 2022) 56% of staff were "professionals" and the others were in "administration".

Jane Street's own UK accounts indicate that traders and technologists combined accounted for 73% of its staff in 2022. On this basis, 1,932 of Jane Street's 2,631 global staff might be considered to have worked in "professional roles" (the remainder worked in "infrastructure') globally last year, and their revenues per head would have been $8.2m. That's still more than Millennium. Jane Street remains the winner, although not by so much.

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AUTHORSarah Butcher Global Editor

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