Commodity trading’s apex predators aren’t leaving anything for their rivals
It’s good form in the animal kingdom that after a lion or tiger or whatever else eats its fill of a catch, it leaves the rest to go around to its less voracious neighbours. The lions and tigers of finance, however, are somewhat less generous.
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George Carroll, head of markets recruitment in EMEA for Selby Jennings, described it in similar terms. “The hedge funds are where all the gaps originate from,” he said. “Hedge funds take all the best talent from all the best shops in the world.”
These days, hedge funds are hunting in commodities. It’s a natural place for them to be, given instability in the Middle East and its impact on global shipping and supply chains, oil especially. The problem is that it’s somewhere that everyone wants to be. “Everyone wants to grow in commodities at the moment,” Carroll said, “and there’s just a shortage of talent.”
The primary victims are the banks. “You have global investment banks losing their EMEA or global business heads to hedge funds,” Carroll said. Examples include Arthur Goossens, BNP’s co-head of commodities trading, who left for Schonfeld back in February, as Bloomberg reported.
It’s not just investment banks losing out, however. Commodities trading houses are also being swept for talent by hedge funds – although they tend to have their own feeding grounds in their smaller rivals, Carroll explained.
At the highest levels, it’s also harder for hedge funds to hunt commodities traders in their own houses, on account of their exceptionally high pay – Vitol, for example, paid its partners an average of $17.6m for their work in 2024. Given that hedge funds primarily attract with their generous pay, it can be hard for them to compete on that basis.
If you want to get a job at a hedge fund, the most important thing is the ability to, and the experience of, managing risk. “That’s probably the main reason why our candidates would get rejected by a hedge fund,” Carroll said. “They haven’t got experience managing enough risk, they haven’t got experience of some sort of drawdown, they haven’t got enough experience generating significant alpha.”
As such, banks remain the best place to learn the business, even though hedge funds hire their own interns and graduates these days. “A lot of banks offer quite a lot of responsibility from three, four years onwards,” Carroll explained. “You can be managing a small book at four years of experience. At a hedge fund, you’re nowhere near managing anything at four years.”
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