Morning Coffee: Barclays' traders may have made Goldman Sachs' traders' mistake. Jain Global says its Millennium move is really great

It's European bank results week. Barclays is first off the block with a set of results suggesting that if its fixed income traders were to speak to their counterparts at Goldman Sachs, they might find things in common.

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As a reminder, Goldman Sachs' traders underperformed their US rivals by virtue of problems on the macro desk: Goldman's traders were positioned for interest rates to fall; the war means this hasn't happened. Goldman's fixed income sales and trading revenues fell by nearly 10% as a result. 

Did something similar happen at Barclays? The British bank's fixed income trading revenues were up 1% in Q1. This was the second worst performance, after Goldman Sachs, so far.

What went wrong? Barclays doesn't say, but the omission may be telling. While Barclays says its markets revenues were driven higher by equities and by credit trading, there is no mention of macro (rates and FX) trading. By implication, macro traders seem to have been the problem.

For the moment, it's worth remembering that Barclays' macro trading team has lost a lot of good people and will probably need to hire some more soon. When it does, it may find Goldman Sachs in the market for talent too. 

Separately, now that hedge fund Jain Global is giving back investors' money and will soon be taking money entirely from Millennium, there have been observations that maybe it's not so easy to set up your own multistrategy hedge fund after all. The rising cost of "talent, infrastructure and capital," is becoming prohibitive, one hedge fund headhunter observes to Bloomberg. 

Let this not be said to Bobby Jain, though. Bobby says that taking money from Millennium is not capitulation but the opportunity he had hoped for. The Financial Times reports that Bobby told his people yesterday that: “Scale is paramount in this industry...We always knew that, and we took the challenging route out of the gate to get there. Millennium just collapsed the timeline.” 

If this is not convincing enough, Jain also reportedly declared that: “It’s about accelerating our trajectory in a period where scale and resourcing will define the winners and losers,"

Maybe all hedge funds should run on Millennium's money in the future.  

Meanwhile...

Goldman Sachs is very excited about M&A and says that although there is "humility" in the market, the cycle has "momentum." Investors are having very deep thoughts about "terminal value," which means the value of the company in the infinite future. "They have to buy terminal value. So acquirers are leaning in. " (Goldman Sachs) 

Citi hired James Carolan from Deutsche Bank as global head of FX structuring in New York. (Financial News) 

RBC hired Jackson Graham as the head of single-name CDS trading from Squarepoint Capital. (Bloomberg) 

Investors in Blue Owl Capital Corporation II do not want to sell to Boaz Weinstein for 65 cents on the dollar. Weinstein has been saying things like: “We’re in the super early innings of the wheels coming off the car . . . for this industry of semi-liquid, contingent liquid products facing rising redemptions, which is going to create its own velocity.”  (Financial Times) 

Chak Raghunathan, the former chief risk officer at Apollo, says life insurance businesses owned by big funds could struggle in a downturn. “When you’ve got asset manager owned insurers, who are not traditional life insurance people, you get in trouble, because the liquidity premium that has been assumed away is a significant risk.” (Financial Times)  

London bankers won't be so fit and proper. The UK government is touting a bill that's s expected to allow it to scrap the certification regime, which requires financial services companies to check thousands of senior staff are fit and proper every year and record the results on a central directory. Banks want ringfencing rules relaxed too.  (FT) 

The British govenmet also wants to shorten the time for bringing IPOs to market by rolling back a 2018 rule designed to bring external research into IPOs so that investors get an external perspective on the firms coming to market. (Bloomberg) 

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