A Barclays Plc (BARC) trading team that’s leaving this year to start a quantitative investment firm will take 60 bank employees with it, adding to Wall Street’s migration to the $2.8 trillion hedge-fund industry.
Olivier Durantel, Gregoire Schneider, Antoine Fillet and Maxime Fortin of the British bank’s nQuants unit will form the venture, according to a person with knowledge of the plans, who asked not to be identified because the information is private. The firm, which hasn’t yet been named, will use algorithms to trade mainly equities and other liquid securities globally.
Barclays Chief Executive Officer Antony Jenkins signaled last year that the bank would exit businesses that don’t interact with clients. NQuants, which Durantel and Schneider originally founded at Lehman Brothers Holdings Inc. in 2000, has been pooled within Barclays among non-core businesses and assets the bank plans to sell or wind down under a reorganization announced in May, according to the person. Barclays said that month it would eliminate 7,000 jobs at its investment bank as it faces pressure to boost returns.
The U.K.’s second largest lender rose 0.4 percent to 217 pence in London, paring declines this year to 20 percent.
Marc Hazelton, a spokesman for London-based Barclays, and Durantel declined to comment on the departures and the new firm’s plans.
Barclays won’t invest or take an ownership stake in the quantitative firm, the person said. Among those joining are David Jack, a managing director at the bank who ran the Electronic Trading Technology group, which has had oversight of Barclays’ dark pool, and Christopher Newman, who joined Barclays this year from Israel Englander’s hedge-fund firm Millennium Management LLC, where he was global head of operations, according to the person.
NQuants, founded within Lehman Brothers in 2000 by Durantel and Schneider, was sold to Barclays in 2008, following the acquisition of the defunct bank’s North American operations. Fillet joined nQuants in 2003 and Fortin in 2004.
Top bankers and traders have exited the biggest Wall Street firms for more lucrative jobs in the hedge-fund industry as regulation has intensified following the 2008 financial crisis and lower returns have pushed banks to cut the amount of revenue they set aside for compensation.
Mark Standish, the former co-head of RBC Capital Markets, and Richard Tavoso, who oversees RBC’s global arbitrage and trading business, are forming Taursa Capital Partners. The RBC spinout will be among the biggest teams to leave a bank since Peter Muller, who ran a trading group at Morgan Stanley (MS), left in 2012 to start hedge-fund firm, PDT Partners LLC in New York.
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