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Morgan Stanley traders quit for hedge funds before bonus season

Now that it's Q4, it's unusual for traders in investment banks to leave their jobs, and bonuses, behind. But when a hedge fund like Millennium or Citadel comes with their high pay and allegedly high sign-on bonuses, any sane trader will probably leave. 

Two senior Morgan Stanley traders have succumbed to temptation. Chris Rivelli, Morgan Stanley's London-based head of EMEA FX derivatives and global exotics trading is joining Millennium as a macro portfolio manager in St, Helier, Jersey. Ben Levine, a Morgan Stanley managing director in the New York derivatives structuring team is joining Citadel in New York, where he will lead the hedge fund’s risk transfer solutions team.

The exits come after Morgan Stanley announced it was cutting 3,000 jobs in May, although neither man is likely to have fallen foul of the cuts. Morgan Stanley is due to announce its third quarter results next week. In the first half of 2023, revenues and profits in investment banking fell 8% and 37% respectively. Although Morgan Stanley doesn't break out headcount for individual subdivisions, total compensation spending in the investment bank increased by 8%.

In the circumstances, it's not hard to see why a big multi-strategy hedge fund might be more appealing than trading at a bank. Bank traders can expect around 5% of the profits they generate – known as pnl – to be paid to them as their bonus, whilst hedge funds pay around 10-15%.

Millennium has been hiring heavily in London, with headcount going from 566 in 2021 to 765 in 2022 according to recently released accounts. Millennium fund paid an average of £1.1m ($1.3m) per head in London last year. This figure includes administrative staff (who skew the average down significantly).

Millennium's other recent recruits include a new head of AI from Bloomberg in New York. It also added a JPMorgan tech MD to be its head of rates and macro technology in London. Millennium is in talks to launch a partnership with Schonfeld, a fellow hedge fund, under which Schonfeld will manage part of its capital.

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AUTHORZeno Toulon

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