Morning Coffee: Hedge fund quant says he worked for less than $20k a year. UBS associates subjected to six month pay kink

“Whatever we do, we’ll do it together”.  Close colleagues in banking often say things like this to one another.  The bonds of trust and comradeship are more important than commercial or employment relationships, and many people think of their career in terms of their allegiance to a small team or a single mentor rather than any larger institution.

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But however noble the sentiment, you shouldn’t mistake it for a contract.  Finance is a tough and volatile world.  Under pressure, people sometimes discover things about their friends – and themselves – which they might rather not have known.  And even with the best will in the world, no matter how strong a friendship is, it can’t make something commercially viable if the numbers don’t add up.  Some other things people say to each other in banking are “don’t let your mouth write a check that your wallet can’t cash”, and indeed “if you really want loyalty, get a dog”.

At one point, Robert Sicari and Wooyoung Hong had a really strong relationship.  Sicari was a portfolio manager at hedge fund Brevan Howard, and in July 2023, Hong was hired to work for him as a quantitative developer and researcher.  Hong says they spent weekends together at Sicari’s apartment. 

Then, in November 2024, they were both fired by Brevan.  Sicari began trading his own money, with a view to launching a fund, ThirtyPark, which was set up in October last year.  Understandably, he invited his friend and junior to come along, and the fund launched.

But bootstrapping a hedge fund is difficult.  Unless you’re very lucky or well-connected, there is likely to be a period of time when you’re basically managing your own money (and perhaps that of a few friends and family) in order to build the track record that allows you to market to outside investors.  During this period, cash is tight; it’s not possible to pay yourselves Brevan Howard-like salaries (Hong says he got $400k a year at Brevan Howard in Hong Kong).  Much like any other start-up, the founders are mainly working for the value of their future equity.

That equity seems to be the reason why ThirtyPark has ended up in the news, via a court filing with the New York State Supreme Court. Wooyoung Hong claims that the deal Sicari offered him included 30% stake in ThirtyPark, plus half of the profits on a designated set of the fund’s trades in Sicari's personal portfolio.

It’s always hard to tell exactly what went on from one side of a legal dispute, but the quotes and comments so far seem to suggest that there had been an underestimation of how much cash would be available, once administration, financing, margin and other expenses were taken into account.  The two men disagreed about money (Sicari has declined to comment to date, other than to confirm ThirtyPark is no longer operating, according to Bloomberg).  By the time the relationship broke down completely, Hong says that all he had received was a payment of $20,000 between December and January.

It’s a sad sounding story, the final truth of which will eventually come out in the courts.  There might not be much to learn from it either – it certainly doesn’t mean that you shouldn’t trust people, or that it’s bad to start a business with your friends.  It might just be worth remembering when someone says that they’re with you for better or worse, that the divorce courts are full of people who said that, and meant it, at the time.

Elsewhere, it’s a great day for a young banker when they graduate from the analyst program and become an associate.  For UBS juniors in Zurich, however, it’s going to be approximately 11% less joyous. 

This is always a difficult one for payroll to handle, because analysts are typically promoted on the second anniversary of their starting date (or the third, if your employer is old-fashioned or your MD thinks you’re not ready).  That doesn’t usually coincide with the compensation year for the rest of the bank, so you go from “Analyst-2” to “Associate-0”, usually with a bit of a bonus.  Then when everyone else starts a new comp year, you become “Associate-1” and start earning a proper bonus based on your own performance rather than being set for the whole class.

UBS previously paid associate-0s at the same rate (CHF175k) as first-year associates.  They’ve cut this to CHF155k so that the gap from the analyst scale isn’t quite so huge.  But really, by the time you reach this early milestone in your career, you ought to be growing out of caring too much about the basic salary.

Meanwhile …

“Corbets Capital” is named after a ski run in Wyoming, although as the discretionary equities arm of Balyasny, it is also where you would find the “core bets”.  They are hiring at the moment; Noah Hornstrom has just joined from Citadel. (Financial News)

Market strategists love their buzzwords, and apparently the current trend is to emphasise “quality” in stock picking.  Everyone has their own definition of what “quality” means, although it mainly means “numbers go up”. (Business Insider)

If you’ve got eight years of experience as a corporate writer, and no ambitions for job security, Anthropic is offering $345,000 a year, presumably until the product can do the writing itself. (Business Insider)

JP Morgan is handing back its capital markets authorisation in Turkey – this is unlikely to be a big set of redundancies as they point out that the bank’s Istanbul branch (which continues) had not actually done any capital markets business since 2015. (Bloomberg)

Rogo, the “AI for bankers” startup founded by a computer scientist and two guys from JPM and Lazard, is hiring “aggressively” in Europe.  It wants to hire 200 people, including researchers, bankers and compliance specialists, to help build and market its products, with the aim of “making sure bankers aren’t going to bed at 5am” but also “taking the top groups and helping them 10x their revenues.” (Financial News)

For complicated historical reasons, it is illegal to trade futures contracts on onions in the USA. Some college students are campaigning to legalise it. (Marketwatch)

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