Has the last oasis of banking commodities recruitment finally started to dry up? BTG Pactual, the Brazilian investment bank, stated its intention to hire around 100 commodities professionals at the tail end of 2013 to fill the gap left by other investment banks. However, recently there’s been a raft of departures.
So far this month, at least four commodities traders have headed for the door, according to filings on the Financial Conduct Authority register. This might seem like an insignificant number, but BTG is one of a handful of investment banks which has been actually bringing in any commodities traders at all. After revenues started tumbling most investment banks cut commodities traders, while others – notably Credit Suisse and Barclays - exited the business entirely.
BTG hired Phil Beatty, a former Goldman Sachs managing director who latterly ran the commodities trading business at hedge fund Millennium Partners, in November 2013. He left earlier this month. So did James Gutman, formerly a partner at Armajaro Asset Management, who joined BTG around the same time to trade industrial metals, and Nimalan Neelakandan, a cross-energy trader who joined from Barclays and Maxim Zaitzev, a commodities trader who joined from EDF Trading.
It seems unlikely that these departures signal a complete about-turn for BTG’s commodities expansion, however. In November, the bank said that commodities now accounted for a third of total sales and trading revenues. But the fact that traders are heading for the door is a concern.
BTG did not respond to requests for comment.
Goldman Sachs was one of the few investment banks to remain fully committed to its commodities business, but a rare glimpse into revenues in its fixed income currencies and commodities business (FICC), shows what a torrid time the sector is having. Commodities now account for 14% of fixed income revenues – roughly half of what they did pre-crisis.
Most commodities traders have been attempting to find new employment in commodity trading houses. Goldman’s lead gasoline trader, Steve Barclay, left to join Mercuria earlier this year.
There is another, small, option for commodities traders looking to stick with an investment bank. Russian firm Sberbank has increased its commodities staff to 20 people, up from four 18 months ago and is likely to continue to hire.