Nelson Saiers, a managing director for proprietary derivatives trading at Deutsche Bank AG, left Germany’s biggest lender to work for Alphabet Management LLC, a hedge fund that specializes in options.
Saiers joined New York-based Alphabet this week, according to Jason Adler, a managing member at the hedge fund that has about $170 million in assets. Saiers will lead a group that trades derivatives including options to bet that volatility levels for stocks and other assets worldwide are too high or low in relation to each other, Adler said.
“There’s been continued selective hiring across multiple strategies at many hedge funds,” said Ross Baltic, a managing partner at New York-based Mercury Partners, a New York-based recruiter for hedge funds. “We’re seeing interest across different assets, including volatility trading.”
Alphabet gained 11 percent in the first half of this year, according to a letter to investors obtained by Bloomberg News, compared with an average drop of 1.6 percent for equity hedge funds tracked by Chicago-based Hedge Fund Research Inc. Alphabet lost 8.9 percent last year after surging 52 percent in 2008, according to the letter. The Hedge Fund Research gauge rose 25 percent in 2009 and lost 27 percent in 2008.
Deutsche Bank is winding down its proprietary trading operations, which buy and sell stocks with the bank’s own money, following losses from the financial crisis. Anshu Jain, the head of its corporate and investment bank, has cut capital available for equity proprietary trading by 90 percent and closed the credit proprietary trading desk. Pablo Calderini, the head of equity proprietary trading, is leaving to join a hedge fund.
Doctorate in Math
Renee Calabro, a New York-based spokeswoman for Deutsche Bank, declined to comment on Saiers.
Saiers, 35, worked at Deutsche Bank in New York for three years and previously held trading positions at UBS AG and Susquehanna International Group LLP, and earned a doctorate in math from the University of Virginia, Adler said. Saiers didn’t respond to a request for comment.
“It’s continuing the trend where hedge funds are returning to volatility trading strategies,” said Jason Kennedy, chief executive officer of Kennedy Group of Cos., a London-based executive search firm. “That market has been fairly nonexistent for the last couple years and, thus, the hedge fund world axed a lot of traders and lost a lot of expertise in the area.”
Jeremy Wien, the head of VIX options trading at Societe Generale SA, left France’s second-largest bank in March to trade derivatives at Alphabet. Investors use options on the VIX, as the Chicago Board Options Exchange Volatility Index is known, to hedge against stock market declines and bet on equity swings.