Blackbox

Ex-Andurand quant Adrien Chicot has founded Borel Capital, a systematic trading firm with intern P&L sharing Borel trades an undisclosed amount of its own capital and is hiring 10 paid quant research interns, according to eFinancialCareers. Each intern gets six months to build a model on any asset class. Models that pass get capital, and the intern gets a full-time role. Juniors earn a direct share of their model's P&L once it goes live. Models that fail end the internship. A new cohort starts every six months. The first class needs EU work rights. Paying juniors on live P&L from day one puts the pod model at the intern level. Lets see how it works out.

Hedge fund borrowing from banks has tripled since 2020, and prime brokerage is now one of Wall Street's biggest profit pools Equity and fixed-income prime brokerage revenue is expected to hit $47.9B this year, per Coalition Greenwich. Prime services will make up about 38% of bank's equities revenue, up from 10% in 2005. A single large multi-manager or prop trading client can generate up to $200M a year for a bank after trading costs. The leverage, per Fed and bank data: - Top 50 hedge funds borrow about $3 per $1 of AUM - Top 15 borrow about $11 per $1 - Largest funds run 20-25x including derivatives, per one bank executive - Market makers can reach 40x The Bank of England said in July that prime brokerage balances rose about 40% year over year. Goldman and Morgan Stanley still lead. JPMorgan, Citi and Bank of America are pushing for share, alongside BNP Paribas, Barclays and ABN Amro. Competition is loosening terms. Financing commitments for top clients have stretched from about two weeks to one, three and in some cases six months. Post-2008 rules pushed risk-taking off bank balance sheets and into the multi-managers. The biggest platforms ran more than a third of industry trading last year on under a tenth of assets. Funds split positions across several prime brokers, so no single lender sees total leverage. Regulators could look into requiring consolidated position reporting across primes.