Morning Coffee: Citadel Securities did indeed seem to pay its people $2m each on average last year. Dubai hedge fund managers face the risk of having to endure the rain

In return for the mild inconvenience of saying “no, the trading firm not the hedge fund” often at parties, Citadel Securities seems to treat its employees very well indeed. The latest numbers reported by Bloomberg seem to confirm that not only has it had a record year, but that our predictions from last year were correct; the average compensation per head at Citadel Securities is not only into seven figures, but no longer has a one at the start of it. 

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Revenues there grew from $9.7bn in 2024 to $12.2bn in 2025 , and compensation expenses grew a bit faster in percentage terms.  The data only covers the first eleven months, but the bill for that period was apparently $3.5bn.  That would translate to $1.94m each for 1,800 employees for the eleven month period; unless something very strange was going on, that means the full year figure is well above $2m.  (A simple annualization would reach $2.1m per head, and if the final month includes any element of “trueing up” of bonus accruals, it could be higher).

Averages always conceal as much as they reveal, of course, but Citadel Securities doesn’t have very many junior employees and admin people to bring the average down; even the interns are on the pro rata equivalent of $200k for the summer program.  So it’s very likely that if you met someone at a party the other week who said “no, not the hedge fund”, then you were talking to someone really quite rich. Particularly if they were a maths genius or very avuncular.

Citadel Securities is likely to be fine with this. The non-personnel costs of running a modern trading business are considerable, but $2.1m a head is very affordable when your revenues are $12.5bn and $6.5bn of this is profit.  And whether Citadel Securities likes it or not, it will probably have to pay up, because right now, it seems like it’s a very strong name to have on your resume in terms of being hired by other trading operations.

So, although the question of “bragging rights” doesn’t really arise (the compensation structures are completely different, and you can’t compare the revenues of a trading business to a set of investment returns, Citadel Securities is by no means a poor relation to the more famous multistrategy fund that shares its name.  Who knows, maybe there will be a barbecue somewhere in the Hamptons this year where somebody utters the phrase “oh no, not the trading firm, the hedge fund”.

Elsewhere, although the climate and nightlife are famous, and the cultural offerings arguably overrated, it would be ridiculous not to admit that a major reason why hedge fund employees were so keen to move to Dubai wasn’t tax.  And now, after a sudden and sharp reassessment of the lifestyle factors, some of Millennium Management’s expat staff have decided that although they have left the Gulf and don’t want to return, that doesn’t mean that they are completely willing to give up on the dream of keeping their gross income all for themselves.

And so one of the options that Millennium, along with a few other hedge funds, is apparently exploring is an expansion of its Jersey office.  British, Irish and EU citizens with UK settled status don’t need to get any new work permits to go there, and while it’s not completely tax free, income tax is only 20% and there’s no capital gains tax.

Jersey also has quite a lot of amenities for the rich, and if you like boiled new potatoes, there’s nowhere on earth to compare.  It’s also considerably more convenient for London (perhaps dangerously so, if the ease of taking a helicopter makes you lose count of the days needed to establish your tax residency).  But it has to be admitted, although Jersey is the sunniest place in the British Isles, that’s not up against demanding competition; unlike Dubai, it often goes months without having two consecutive days without rain.

The clock is ticking, to a certain extent.  The Gulf States are being generous about allowing expats to stay away while retaining their residency, but any British or European citizens who have stayed home may find their home countries less resident.  And there’s the danger of one’s employer remembering about another island with good tax arrangements, very reliable internet connections, but out in the rainiest bit of the Irish Sea.

Meanwhile …

Carlyle Group are lucky enough to have gone into an extremely tense geopolitical situation with a vice-chairman who is better placed than most to analyse developments, because he’s the former supreme allied commander of NATO.  Admiral James Stavridis is pretty eyes-open about the “tiny flickers of good news”, and surprised that investors are not more focused on downstream consequences of oil shortages.  But he notes that post-war reconstruction has often delivered some huge economic success stories; it’s not impossible that Iran and Cuba might be the hottest private equity stories of 2036. (Semafor)

If you’re an “almost unemployable misfit”, but in a “creative or technical savant” way rather than an “obvious compliance risk” way, Hummingbird Ventures might want to talk to you. (FT)

Alvarez & Marsal had the biggest partner promotion class ever last year and they haven’t stopped – they want to add “hundreds” of partners by hiring and promoting, to reach ambitious revenue targets. (Financial News)

One of the Big Four firms has apparently won the contract to audit Tether, although they’re currently not saying which one or when the audit is going to be carried out.  Although Tether is one of the world’s most profitable companies per employee, it’s not necessarily one of the most transparent, so somewhere a compliance specialist is looking forward to a wild ride. (Bloomberg)

JP Morgan has hired quite a few Bank of America bankers recently – after Roy Wouters and Kevin Brunner, it’ s now recruited Brian Henderson to be head of North American business services investment banking. (Reuters)

The Chinese government’s morality drive has put a stop to the serving of expensive wine at official functions, leaving some producers with as much as $150m of unsellable stock. (WSJ)

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