Elliott Wilson is taking his talents to a different hedge fund in San Francisco.

Wilson, a technology portfolio manager for Balyasny in the Bay Area, is joining $3.7 billion Woodline Partners, sources told Insider. Sources said Wilson is set to focus on software investing in his new role at Woodline.

Prior to joining the $9 billion Balyasny in 2019, Wilson was a portfolio manager at Ken Griffin's Citadel for nearly a decade, and also worked for Steve Cohen's SAC Capital. Woodline, one of 2019's biggest launches, with $2 billion in investor commitments, was founded by former Citadel portfolio managers Mike Rockefeller and Karl Kroeker. 

The young fund focuses on technology and healthcare investing, its website said. While the firm's offices are in the financial district of San Francisco, Woodline invests in equities in Europe and Asia, as well as in the US. 

Wilson will join many former Citadel colleagues at Woodline. Beyond Rockefeller and Kroeker, the firm's chief operating officer Matthew Hooker, chief compliance officer Erin Mullen, and head of quant research Roshan Raman, along with several portfolio managers, are former Citadel employees.

Wilson moved to Balyasny in 2019, when Citadel and Balyasny were aggressively poaching talent from each other on the investment and business development sides of the business.

Balyasny had a banner year in 2020, returning 33% in the firm's flagship fund, Atlas Enhanced. The firm hired a net of 40 new portfolio managers last year, according to Bloomberg, bringing the firm's total to 107. 

Balyasny declined to comment. Woodline and Wilson did not respond to requests for comment. 

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The ongoing fiasco that grew out of online broker Robinhood's decision to limit customers' ability to buy "meme stocks" like GameStop in January has produced a lot of noise, but also a silver lining.

Robinhood's move, which angered customers and some online commentators, also brought attention to how retail brokers like E*Trade, Charles Schwab, TD Ameritrade and Robinhood handle orders on behalf of their retail customers.

When a customer attempts to buy or sell a share of a stock or other security brokers have a legal and moral obligation to provide their customers with "best execution," which means that these companies must give their customers the best price "reasonably available." But this certainly is not happening in US securities markets today. 

Retail customer orders with commission-free broker-dealers like Robinhood — that do not charge customers a fee to execute their trade — are sold to high-speed market makers like Citadel Securities and Virtu Financial in a scheme called "payment for order flow." In essence, Robinhood and other brokers do not actually match a buyer and a seller to complete a full stock trade.

Instead, Robinhood sells their customers "orders" by the millions to market makers like Citadel, who do the hard work of lining up buyers and sellers in exchange for a fee. These high-speed market makers process massive amounts of trades every day and have taken over the market. By paying billions of dollars in kickbacks to retail brokers, on a typical day Citadel processes 40% of all retail securities orders in the US stock market, making Citadel the most powerful middleman on Wall Street.

Citadel, Virtu, and Robinhood claim to benefit the retail investor by offering better prices than they might get on exchanges. It is true that Citadel sometimes gives retail investors a better price than the National Best Bid and Offer (NBBO), basically what regulators have determined to be the best selling and buying price for each security, displayed by the Securities Information Processor (SIP). But the NBBO SIP is a slow data feed that provides incomplete information on buy and sell orders displayed on exchanges. 

The NBBO benchmark Citadel and Virtu use is widely understood to be outdated and incomplete. But brokers selling their order flow and the market makers who buy that flow and execute their trades have a strong incentive to ignore non-displayed orders because poor execution quality for retail investors translates directly into profits for them.

The best execution requirement requires best execution. It is not sufficient to provide a slight improvement on an inferior price. To illustrate how the market works, suppose that the displayed NBBO SIP for a stock is a bid, the highest price a buyer is willing to offer, of $10.00 and an offer, the lowest price at which a seller is willing to sell, of $10.30.

A Robinhood customer sends an order to sell 100 shares to Robinhood, which sells the order to Citadel. Citadel might, at its discretion, give a sort of imaginary "price improvement" over the NBBO SIP and buy the 100 shares from the seller at $10.01, a one penny improvement over the "best" bid of $10.00. This gives the retail seller price improvement of ($0.01 x 100 shares) $1.00 over the best displayed bid on the SIP.

But Robinhood's customers are entitled to more than a discretionary increment of price improvement over the NBBO. They are entitled to the best price "reasonably available," which means that they should have access to the vast swathes of the market that are not displayed on the NBBO SIP, but are available Citadel and Virtu through their network of systems that track buy and sell orders that are not displayed on the SIP.

In particular, it often is possible to execute a trade at the midpoint between the NBBO best bid and the best offer. Midpoint pricing would have given the Robinhood seller $10.15 for their shaper share price improvement of $15.00 rather than just $1.00. That extra $14.00 represents the profit that Citadel makes on the trade minus whatever pennies Citadel paid for the order flow.

Of course, if payment for order flow were eliminated, commissions for discount brokers likely would return, but even with commission of $7.00 per trade the retail customer is better off without payment for order flow.

In a nutshell, Citadel is in direct competition with the retail investor for the best prices and has paid retail brokers like Robinhood billions of dollars to help them cover up this conflict. In fact, on March 11, Virtu CEO Douglas Cifu admitted in a TV interview that retail customers of brokers like Fidelity, who don't pay for order flow get better execution quality than customers on venues like Robinhood.

The biggest question facing Gary Gensler as he takes the helm of the Securities and Exchange Commission is whether Citadel and Virtu have a duty to seek the best price in the market or whether the "duty of best execution" has been truncated to mean that customers are only entitled to the NBBO SIP.

At present, Virtu and Citadel decide what, if any, price improvement to give to customers. Price improvement is arbitrary and discretionary. And it's a zero sum game. The better the deal the retail gets, the less money that Citadel and Virtu make.

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Here's a rundown of news on hires, exits, and promotions from the past week.  Are we missing anyone? Let us know.

• BlackRock has hired Stephanie Smith to be the new chief operating officer of the asset manager's alternatives business, Insider reported this week. She is expected to begin her new role this summer, and will be based in New York City, reporting to Edwin Conway, global head of BlackRock's Alternative Investors. Smith was most recently the head of operations for the consumer and wealth-management division at Goldman Sachs, a firm where she spent more than two decades.
• At BlackRock, Smith replaces Todd Slattery. Slattery will serve as a platform specialist in BlackRock Alternative Specialists, a group in BAI focused on sales and consulting in the alternatives space. Slattery is expected to report to David Lomas, a managing director and global head of the unit, Insider reported this week.
• Goldman Sachs has appointed a new chief operating officer for global marketing. Jason Hill announced his appointment to the role in a post on LinkedIn, which was also confirmed by a bank spokesperson. Hill served as a vice president in brand marketing since March 2018 until he assumed the new role as COO this month. Previously, Hill was the global head of media at asset manager BlackRock.
• The $9 billion hedge fund Balyasny Asset Management poached Travis Potter, a top volatility trader at Goldman Sachs, sources familiar with the matter told Insider. At Goldman, Potter was a managing director, according to his LinkedIn page. He joined Goldman Sachs in 2005.
• A raft of departures hit Credit Suisse this week, as the fallout of its $4.7 billion hit from the collapse of the hedge fund Archegos Capital Management continues to leave its mark. Known departures include:
  
  • Brian Chin, CEO of the investment bank, who will be replaced by Christian Meissner.
  • Lara Warner, chief risk and compliance officer. Her functions will temporarily be taken over by interim chief risk officer Joachim Oechslin and interim global head of compliance Thomas Grotzer.
  • Paul Galietto, head of equities sales and trading.
• Houlihan Lokey bulked up its European healthcare team, poaching Paul Tomasic  and Andrew Murray-Lyon from RBC Capital Markets in London, Insider reported. Tomasic joins Houlihan as a managing director and head of European healthcare. Murray-Lyon joins as a director in the firm's healthcare investment-banking business. Additional hires to the team include Federico Pavia Ghione, an associate, and Owen Richards and Zofia Duffy, both financial analysts. 
• JMP Securities, a division of the financial services firm JMP Group LLC, announced this week that Alfredo Barreto, Jr., has joined the firm's investment-banking group as a managing director based in its San Francisco office. Barreto will advise the company's corporate clientele that work in the cannabis sector, the firm said in a press release. Previously, Barreto was a partner at the Bay Area boutique investment bank Wood Warren & Co., which focuses on clients in the food, beverage, and agriculture industries. He previously spent time at other firms including The Silverfin Group, JPMorgan Securities, and Morgan Stanley.
• SVB Leerink, an investment bank specializing in healthcare and life sciences, announced that it has hired Andrew Fineberg to be a new managing director leading the company's structured finance practice. Fineberg will be based in New York City and report to Dan Dubin, a vice chairman and global co-head of investment-banking, the company said in a press release. Finberg comes from MTS Health Partners, where he spearheaded structured finance advisory efforts.
• SVB Leerink also announced that it has hired Jack Bannister as a managing director working on its equity capital markets team, according to a press release. Bannister, formerly a vice president in healthcare equity capital markets at Goldman Sachs, joins SVB Leerink in New York, and will report to Rahul Chaudhary.
• Talos, an end-to-end provider of tech infrastructure for institutional trading of digital assets, announced it has recruited Justin Schmidt to be its new head of strategy. Schmidt was previously the head of digital asset markets at Goldman Sachs since 2018, the company said in a press release.
• Roth Capital Partners, an investment bank that targets the emerging growth sector, announced that Ivan Saval will join the firm as a managing director focusing on the agricultural technology sector. Previously, Saval was a managing director at the National Securities Corporation, another investment bank, where he worked in its food and agribusiness practice, the company said in a press release.
• Werner Kruger joined UK-based buy now, pay later startup Zilch as chief data officer, Insider has learned. Kruger previously held leadership roles in data science at fintechs including Bloom, Monese, and fellow BNPL player Klarna. Kruger will lead Zilch's data initiatives as the fintech looks to launch more personalized payment offerings for consumers.
• D.A. Davidson, a financial services firm based in Montana, announced that it has hired Eric Stetler as a new managing director in investment-banking in the diversified industrials sector. Stelter will be based in the firm's Chicago office, according to a company press release. He has joined the firm from Baird, where he spent more than a decade handling M&A, debt, and equity financings.
• LafayetteSquare, an asset manager, announced that Caitlin McLaughlin is joining the company as its new chief people officer, overseeing human resources efforts. Previously, McLaughlin was an executive vice president at PNC Financial Services Group, where she spent 12 years overseeing functions like enterprise talent strategy, diversity recruiting, and professional development programs, the company said in a press release. Prior to PNC, she was a managing director at Citigroup, overseeing global campus recruiting and program management.
• Investment manager and capital markets firm Artist Capital announced two new executive hires. Ramesh Parameswar has joined Artist as a managing director from global macro fund Trend Capital Management, where he led business development. He previously worked in alternative assets at Citigroup. Patrick Neuman joined the firm as a director from alternative asset manager Trailmark Inc., where he advised fund sponsors.
• Citadel has recruited David Kim, the former US head of equity client solutions at Bank of America, according to a report from eFinancialCareers. Kim came to Bank of America in 2018 from JPMorgan Chase, where he led US flow trading. Prior to that, Kim worked at Goldman Sachs.
• Point72 Asset Management has recruited Jason Kaplan to be a new portfolio manager, according to Hedge Fund Alert. Kaplan previously spent time at NWI Management, Goldman Sachs, Bear Sterns, and Citigroup.
• Millennium Management appointed Ian Singer as a new portfolio manager, according to Hedge Fund Alert. Singer was previously a partner at Deep Basin Capital, a fund focused on energy investments, and spent time at Citadel, Zimmer Lucas Partners, and consulted for asset managers.
• Verition Fund Management recruited Gregory Reiss as a new portfolio manager investing in "utilities, renewable-energy operations and power companies," according to Hedge Fund Alert. Reiss previously spent time at Centenus Global Management, a fund manager backed by Millennium Management, as well as Deutsche Bank and Morgan Stanley.
• Stephens, a family-owned investment company based in Little Rock, AR, has announced that Brett Huff has been appointed managing director within the technology group of its investment-banking division. He will be focused on the financial technology sector. Previously, Huff was a managing director on the business services team within the firm's equity research department. He has been with Stephens since 2005, the company said in a press release.

Shannen Balogh, Dakin Campbell, Dan DeFrancesco, Carter Johnson, Meredith Mazzilli, Alex Morrell, Bradley Saacks, and Rebecca Ungarino contributed to this report.

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Citadel has poached the head of equity derivatives trading in North America from Citigroup, the latest in a string of buy-side defections from Citi's derivatives unit. 

Dan Baranovsky, who ran North American equity derivatives and cash trading at Citi, has resigned to join Citadel as a portfolio manager, according to sources familiar with the matter. 

A Citadel spokesperson confirmed the hire. A Citi spokesperson declined to comment. 

Baranovsky joins a division at the $35 billion hedge fund that has grown rapidly over the past year and a half. Pablo Salame joined Citadel from Goldman Sachs in October 2019 as global head of credit, and one of his first hires was David Casner, a former Goldman partner who was the head of US equity volatility trading and global co-head of equity flow derivatives trading at the bank.

Casner started last June, tasked by Salame with running the fund's convertible arbitrage strategy as well as building out an equity derivatives strategy.

Baranovsky is the second portfolio manager Casner has poached from a big bank for the strategy this month. David Kim, the head of equity client solutions at Bank of America and the firm's most senior derivatives trader, has also joined Citadel, Bloomberg previously reported. 

Salame has more than tripled the number of portfolio managers in the credit division since joining. 

For Citi, Baranovsky's exit adds to a growing list of departures from its equity derivatives desk, one of the hottest corners in Wall Street trading. Seok Yoon Jeong, a managing director in flow volatility trading, resigned and is said to be joining Brevan Howard, according to sources familiar with the matter.

Jeong joined Citi from JPMorgan in 2018 as head of flow volatility trading in the Americas and was promoted to MD later that year. He was layered last year when Mark Chen was hired back from Deutsche Bank to lead flow derivatives trading for the bank. 

Benjamin Texier, a director in equity derivatives trading, joined Millennium Management, according to sources familiar with the matter, while a junior equity index options trader name Dake Zhang left for Citadel in December.

Representatives for Brevan Howard and Millennium each declined to comment. 

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Melvin Capital closed out of all its public short positions in the first quarter following a battle earlier this year with GameStop enthusiasts who drove up the share price and caused major losses for short-sellers. 

According to a filing submitted to the Securities and Exchange Commission, the New York-based hedge fund exited all of its put options — meaning its bets against certain stocks — in the first three months of the year. 

Those short positions included Reddit-driven meme stocks GameStop and AMC Entertainment, along with other lesser-known names like logistics company Cryoport, healthcare company Viatris, and Invesco Solar ETF.

The firm still could have more traditional short positions that don't have to be publicly disclosed, though. Melvin declined to comment to Insider on why it closed out of the put option positions and if it had any other private short positions. 

At the beginning of the year, Melvin Capital and other hedge funds found themselves in a losing battle with an army of Reddit day traders who caused GameStop shares to skyrocket, squeezing the firms which had big bets against the gaming retailer. When a stock price goes up, it often causes short sellers to cover their positions by buying back shares at a higher price. 

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Melvin Capital took a 53% loss because of the craze, and its founder Gabe Plotkin took a $460 million personal loss, Bloomberg reported at the time. By the end of January, analysts estimated GameStop short sellers had lost $19 billion in total.

Melvin Capital closed out of its GameStop short position on January 27, and ended the month with $8 billion in assets under management, compared to the $12.5 billion it started the year with. The firm took another loss in March when it closed out the month with a 7% loss, finishing the quarter down 49%, sources told Insider previously. 

Meme stock short sellers continue to be squeezed by day traders. Recently, GameStop and AMC shorts lost nearly $1 billion in just five days of trading, according to ORTEX data, as share prices of the two stocks rallied. 

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The once-red hot market for special-purpose acquisition companies (SPACs) has finally cooled.

The Michael Klein-backed Churchill Capital Corp. IV, once a darling of the SPAC market, encapsulates its recent crash back down to earth in the past two months. 

The stock is trading at around $18 as of May 20, down from its peak of $64 per share in February. The current price is still more than the $10 each share was worth when the SPAC was formed.

Churchill Capital Corp. IV, which currently trades on the New York Stock Exchange under the ticker CCIV, is slated to take the electronic-vehicle company Lucid Motors public in a deal worth about $12 billion, per a February press release. Shares surged over 300% in the weeks as rumors swirled before the deal was announced.

Dozens of hedge funds and money managers have pumped millions into SPACs thanks to a structure that essentially sets a floor price for shares. Churchill Capital Corp. IV was no exception, with names like Millennium, Citadel, and Blackstone comprising its investor base as of the end of last year.

Though the deal is yet to close, many of these funds seem to have soured on the SPAC. Filings show they sold shares amid a decline in positive market sentiment around both SPACs and electric vehicles during the first quarter this year.

However, some firms like Sculptor Capital and Coatue went against the grain, increasing their stakes in the company during this time.

Below are some of the big-name managers that were invested in the SPAC at the end of the first quarter this year. Managers listed either declined to comment or did not respond to requests for comment. 

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Here's a rundown of news on hires, exits, and promotions from the past week.  Are we missing anyone? Let us know.

• A leadership shakeup at JPMorgan provides new clues about who will take over for CEO Jamie Dimon when he eventually retires:
  • The firm tapped Marianne Lake, who had been head of consumer lending, and Jennifer Piepszak, JPMorgan's CFO, to co-lead the firm's sprawling consumer and community banking business, the firm announced Wednesday. The two are frontrunners to succeed Dimon.
  • The pair took over the CCB reins from Gordon Smith, who announced his surprise retirement. When Smith — who had previously been on the shortlist for the CEO position — leaves JPMorgan at the end of the year, Daniel Pinto, another CEO contender, will be the firm's sole president and COO. 
  • Jeremy Barnum, head of global research for the firm's corporate and investment bank and a former CFO for the CIB, replaced Piepszak as CFO, effective immediately.
• JPMorgan also promoted Matt Sable to lead the Corporate Client Banking & Specialized Industries financial institutions group, according to a Thursday press release. In his new role, Sable, who had been the firm's commercial banking strategy head, will focus on mid-to-large cap companies with complex financing needs.
• Morgan Stanleyunveiled sweeping leadership changes Thursday that put four longtime executives who are all men — Andy Saperstein, Ted Pick, Dan Simkowitz, and John Pruzan — in the running to be its next chief executive:
  
  • Andy Saperstein, Morgan Stanley's head of wealth management, will become co-president of the firm alongside Ted Pick, leader of the institutional securities business. Saperstein will now oversee all facets of Morgan Stanely's wealth business, including 15,000 financial advisors; E-Trade; its business that provides financial services to other companies; and firmwide global marketing. Pick will oversee the firm's international operations and co-lead strategy and execution with investment management head Dan Simkowitz.
  • John Pruzan, Morgan Stanley's CFO, will become the firm's COO. 
  • Morgan Stanley promoted head of investor relations Sharon Yesaya to replace Pruzan as CFO. She will also join the operating committee.
  • Shelley O'Connor, who previously co-led wealth management with Saperstein, was promoted to be vice-chairman of the bank and the head of external affairs.
  • Mike Pizzi, who joined the bank from the top spot at E-Trade, will be the new head of US banks.
  • Jed Finn, the COO of wealth management, will join the bank's operating committee.
• Morgan Stanley Investment Management's private credit and equity team nabbed Peter Ma from Colbeck Capital, where he was a managing director, PEHub reported.

• Investment firm Apollo Global Management saw some major moves this week.

  • On Thursday, it announced in a statement that cofounder Josh Harris would step down as managing director once Apollo merges with insurance affiliate Athene. He would remain on the Apollo board of directors and executive committee, the firm said.

  • Craig Farr will join the firm in a newly created role as a senior partner to lead its capital solutions activities, per a press release. Farr, who most recently served as a senior advisor to Carlyle, will report directly to Apollo co-presidents Scott Kleinman and Jim Zelter. 

• Mitsubishi UFJ Financial Group (MUFG) poached nine hires from Wells Fargo this week for its Restaurant Finance group within its corporate and investment banking division, the firm said in a press release. Managing director Nick Cole will head the newly expanded group and managing director Quinn Hall will lead loan underwriting and portfolio management, reporting to Cole. Other new additions include managing director Joe Rinaldi, managing director Eric Schnyder, director Emily Sutton, director Matt Kochan, director Zac Kalemba, vice president Luis Victorio and associate Mike Le. The new hires, who start on June 1, will operate from San Diego, Atlanta, Chicago, and Boston.
• Manulife Investment Managementannounced in a press release that it hired Christoph Schumacher as global head of real assets, a newly created position. Schumacher joined from Credit Suisse Asset Management, where he served as global head of real estate and managing director.
• Wells Fargo appointed John Hackney and James Peery as co-heads of Energy Transition, a spokesperson told Insider in an email. Hackney, who has been at the bank for 17 years, will continue in his role leading Renewables investment banking within the Power, Utilities, and Renewables (PUR) group. Peery, who has been at the bank for over a decade, most recently as head of energy equity capital markets, will lead the newly established Energy Solutions and Technology (ES&T) effort.
• Portfolio manager Doug Heinz left Citadel to join LMR Partners in the same role, sources told Insider. Heinz joined LMR Partners to invest in financial stocks in May.

• Healthcare and life sciences investment bank SVB Leerink announced more hires amid its rapid expansion.

  • The bank poached a team of technology, media, and telecommunications investment bankers from UBS, including group head Jason Auerbach, sources familiar with the matter told Insider. Auerbach, formerly a global cohead of the UBS TMT investment banking group, resigned along with several other senior TMT bankers in his group to join SVB Leerink, the people said.

  • The bank announced in a press release that M. Toby King has joined the firm's Healthcare Services practice as a senior managing director based in New York. King joins SVB Leerink from Citigroup where he spent more than a decade, most recently, as managing director and head of North America healthcare.

• Blackstone's $18.7 billion real-estate investment trust (REIT), Blackstone Mortgage Trust, appointed 36-year-old Katie Keenan as chief executive on Wednesday, per the Wall Street Journal. Keenan was promoted from her prior role as president of the REIT and is set to succeed Steve Plavin, who will be overseeing Blackstone's European debt business.

• Wells Fargo marketing head Michael Lacorazza is leaving the company amid a wider restructuring that includes the retirement of the chief marketing officer role, two sources with direct knowledge of the matter told Insider. He is still with the company and hasn't yet set a firm date for his exit, the people with knowledge of the matter said.

• Tony Kerrison, who is Bank of America's chief technology officer and the leader of its technology and infrastructure services (TIS), has been given a bigger remit and will now report directly to Cathy Bessant, who is Bank of America's top tech executive, Insider reported this week. 

• Mandeep Walia has left Facebook Financial's Novi to be chief compliance and risk officer for payments company Circle, it announced in a Tuesday press release. Walia, who had been Novi's chief compliance officer and head of enterprise risk management, previously worked at other payments platforms including LendUp and Paypal. Her hire comes as Circle has made multiple executives hires over the last few months, including CFO Jeremy Fox-Greene.

• Goldman Sachs' consumer business has a new leader. Peeyush Nahar, a top engineering executive at Uber, is set to join on June 1 as a partner and the head of the bank's consumer business, which includes its digital bank Marcus, according to an internal memo viewed by Insider. 

• Grapevine, Texas-based auto-finance technology company Car Capital nam two new company advisors, according to a press release. Joining the team is John Binnie, who was formerly vice chairman of corporate and investment banking at Bank of America, and Kirk Shryoc, who was managing partner at Hard Right Solutions and co-founder of Mobility Financial Management.

Meredith Mazzilli, Reed Alexander, Bradley Saacks, Carter Johnson, Dakin Campbell, Bianca Chan, Lara O'Reilly, and Alex Morrell contributed to this report.

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Securing a senior position at the top trading and investment firm often results in having to sign a non-compete clause, which means agreeing to stay out of the game for a set time period when switching jobs.

Most executives use that time to switch off and rest up. However, for Colin Lancaster, a former head of macro strategies at legendary investment firm Citadel, his non-compete period occurred during the pandemic and amid a wild market environment, which would be hard for any macro-junkie to tune out. 

Each day, Lancaster noted the volatile market movements in his journal, as he's done for years, and within a few weeks accumulated a vast amount of content chronically an extraordinary period in markets. 

Recognizing this was an incredible opportunity to write a book, within eight months, he'd completed a novel called"Fed Up!".  The story was about a macro trader navigating the pandemic at his London hedge fund. 

"I did want this to be a markets book, because what I know best is macro trading and so I wanted to really capture this period of time through the eyes of a macro trader," Lancaster said. 

All the market details in the book remain true. Where Lancaster took liberties is with character development.

"I thought it was really important because I wanted people who are thinking about getting into this business to have a sense as to the pace of our life and the frenetic nature of it and to feel that energy," Lancaster said.

Although the characters are fictional, the book does provide insight into Lancaster's thought process and insights from working  at a variety of elusive firms such as Citadel, with over $38 billion of investment capital, and Balyasny Asset Management.

Speaking to Insider about the book, Lancaster outlines where he, and his character, converge and shares a rare outlook on markets and the hedge fund industry.

Five qualities that make a great trader

Throughout the book, the reader experiences one-to-one tutorials on markets and life from the main character. At one point, he lays out five qualities that make a great trader.

When asked how those qualities relate to Lancaster's own views on the topic, he said, "it's really those same exact things."

"It's the one part of the book that really came from my own experiences," Lancaster said.

The qualities are:

1) Exceptional decision-making skills

"To me, the best traders are exceptional decision-makers," Lancaster writes in the book. "They're intensely competitive. They don't let emotions affect the process."

2) A heightened level of self awareness

"To be a great trader, you need to know yourself," Lancaster writes. 

Individuals need to understand what motivates them and their cognitive biases that hold them back, Lancaster said in the interview.

3) A well-honed investment process

Traders should develop an investment process in which they have complete confidence, Lancaster said.

4) Be a continual learner

"You need to constantly improve and get better," Lancaster writes. "And this is all after you've spent your 10,000 hours becoming a market expert honing an investment process, or strategy that produces reliable results and is embedded within a prudent risk framework."

5) Create an environment for continual learning

A common trait Lancaster sees among experts in the investment world is a focus on optimal performance both mentally and physically. This means staying healthy and keeping a structured routine to ensure peak performance.

Breaking into trading

Becoming a great trader is a long term journey, Lancaster said. The best traders are those who have experienced different market cycles, such as the unwinding of the technology bubble and the global financial crisis, he said.

"Those [market cycles] just prepare you in a way that you don't have if you're 18 years old," Lancaster said.

For those early in their career, it's important to get exposure, have a passion for the markets and to continue to learn, Lancaster said.

Aspiring traders should seek out mentors to learn from, Lancaster said. Very few books in the bookstore teach how to manage portfolio construction the day after the Federal Reserve hikes rates, he added.

"Fed Up" markets outlook

The book centers heavily on the main character's views on the Federal Reserve and the impact the quantitative easing program is having on society's wealth gap.

"This is where he is really a direct extension of the I," Lancaster said. "I have a view that while the Fed has had excellent intentions in what they've wanted to accomplish, the policies by which they've tried to accomplish these things are now at a point of diminishing returns."

There's now these unintended results from the program and it's amplifying the wealth gap where fewer and fewer people hold more and more wealth, Lancaster said. This is something he worries about a lot.

The market regime has started to shift with some speculative trades like SPACs starting to pop and the crypto markets becoming more volatile. However, Lancaster doesn't expect the  bubble phenomenon to change until there's a policy shift.

"Essentially what we're going to be in a period where you have these constant sets of bubbles that are appearing and may be popping," Lancaster said.

One trigger for change could be when the Federal Reserve slows down the quantitative easing program, which may come later this summer and will inject more volatility into the markets, Lancaster said.

"I think it'll be an incredibly interesting period as we get into the beginning of next year," Lancaster said.

Future of hedge funds

Lancaster will be watching the markets through his new role as global head of macro strategies and fixed income for hedge fund Schonfeld, which manages around $8 billion in assets.

"I love building these types of businesses and this is an amazing firm, one of the oldest firms in existence, and an incredibly strong 600-person organization," Lancaster said.

Hedge funds are firms that use a variety of sophisticated investment strategies to provide returns in any market environment. They have increasingly faced scrutiny for high fee structures and bouts of underperformance.

Lancaster suspects the industry will continue to go through periods of consolidation where the big will continue to get bigger.

One of the problems in the industry is not all the firms that call themselves hedge funds operate as such, Lancaster said.

"Firms that really focus on making money in all market environments, I think there will always be a need for that, producing consistent, uncorrelated returns is a really valuable thing for investors," Lancaster said.

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Robinhood CEO Vlad Tenev endorsed an SEC push to refine how stocks are priced, writing in a blog post that the move would "level the playing field" for retail investors.

Tenev backed a suggestion by SEC Chair Gary Gensler that the agency might waive a rule requiring exchanges to price stocks in pennies. Allowing sub-penny pricing would put exchanges like Robinhood on equal footing with non-exchange market makers like Citadel Securities and Virtu Financial, he argued.

Earlier this month, Gensler acknowledged that the rule banning sub-penny pricing on exchanges could constitute an unearned advantage for non-exchange market makers. He said the SEC would consider changes to the rule, though no formal proposal has yet been offered.

Tenev called for all stock quotes to be given to four decimal places, or a hundredth of a penny. 

Such a change — once considered too insignificant to matter — could smooth trades on low-price, high-volume shares with minuscule bid-ask spreads. In these trades, non-exchange market makers can benefit by undercutting exchanges' bids by a fraction of a penny.

"If the sub-penny limitation is removed, and exchanges reduce fees for retail orders, we could see tighter [bid-ask spreads], even better execution quality for retail investors, more transparency and perhaps more retail order flow executed on lit markets," Tenev wrote.

Robinhood routes its order book to non-exchange market makers in exchange for compensation, a model known as payment for order flow. Gensler has questioned the setup, noting it is non-transparent and banned in the UK and Canada.

Market makers contend that their profits come only when they succeed in cutting prices for clients — or retail investors, in the case of Robinhood.

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Two of Michael Gelband's top tech personnel have left his $13.3 billion firm ExodusPoint Capital Management, sources told Insider.

Sonny Baillargeon and Anil Chandroth — the global head of infrastructure and head of data science — have left the New York-based multi-manager in the last month. It's unclear where the two are headed or who is replacing them. 

The pair were a part of the leadership team for the firm's 158 tech employees, a large team even for the tech-obsessed hedge fund space.

The firm has also recently lost two quant portfolio managers. Ryan Sandor is set to join Citadel's New York office in October as an index rebalancing portfolio manager, the Chicago-based firm confirmed in an email.  His exit comes as quant portfolio manager David Qian leaves for Balyasny Asset Management, which was first reported by trade publication Hedge Fund Alert.

The firm has been aggressive in adding to its team this year, a source close to ExodusPoint tells Insider, with 117 new people joining the manager since the start of 2021. That includes 20 portfolio managers, such as Erik Schiller, a former executive in Prudential's asset management business, and Frank Fehle, a former senior quant at Citadel who will manage money for Exodus exclusively at his Europe-based Ox Galton Partners. Both hires were previously reported by Bloomberg. 

The manager, which was the biggest hedge fund launch in history when it began trading in 2018 with $8 billion, has trailed its main peers in performance this year. It is up less than 3% through the first half of the year, sources tell Insider. The average fund returned nearly 10% through the same period, according to Hedge Fund Research, and ExodusPoint peers like Citadel, Millennium, and Balyasny have outpaced the firm so far this year. 

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High-flying financial players such as hedge funds, private-equity firms, and other boutique investment companies are expanding their Manhattan offices like it's 2019.

The activity reflects the robust fortunes of the upper end of an investment industry that has boomed during the pandemic. The hedge-fund industry, for example, had its best first half of a year in over 20 years, some estimates suggest.

The deals also run counter to the larger office market, where leasing has remained moribund as much of corporate America has been reluctant to commit to office space, grappling with when and how to get employees back to the workplace amid a new phase of the pandemic.

Here are the financial firms planning to expand:

• Tiger Global, a roughly $80 billion investment firm that manages hedge funds and venture-capital investments in the technology sector, is in negotiations to expand its headquarters at 9 W. 57th St., where it has about 50,000 square feet, according to several sources. Tiger is expected to pay over $200 per square foot, more than double the average rent in Midtown Manhattan of roughly $80 per square foot.
• Stone Ridge Asset Management, a $10 billion asset manager, just signed on for nearly 100,000 square feet at One Vanderbilt, a brand-new skyscraping tower next to Grand Central Terminal in Manhattan's Midtown East neighborhood. The company took four floors in the 1,400-foot-tall building, agreeing to rents that increase over the life of the 15-year deal to $245 per square foot — three times the average Midtown rent — according to terms of the lease that a source shared with Insider. The space is several times as large as the office the company occupies elsewhere in Midtown.
• Citadel, a major investment company run by the billionaire Kenneth Griffin, is in talks to expand its presence at  425 Park Ave., an ultra-high-end Midtown office tower under development where Citadel already has pledged to occupy about 300,000 square feet. One source speculated that the firm was in talks to add as much as 70,000 square feet. Another knowledgeable source said Citadel could also seek to add the space in another office building in Midtown.
• The large Manhattan landlord Vornado Realty Trust just signed three deals at the recently built 512 W. 22nd St. in West Chelsea, another Manhattan neighborhood. Hunter Point Capital, Capricorn Investment Group, and Pura Vida Investments each committed to nearly 12,000 square feet, paying rents above $100 per square foot — a premium rate.

A spokeswoman for Tiger declined to comment. A spokesperson at Stone Ridge could not immediately be reached. A spokesman for Citadel declined to comment.

Scott Panzer, a leasing executive at JLL who handles leasing deals at 9 W. 57th St., told Insider that three boutique financial tenants at the tower were expanding in the building and that two other such firms were negotiating to move into the skyscraper. Panzer would not comment on whether Tiger was among the tenants expanding.

Billionaire investment managers expect workers to come back to the office

Workers have increasingly sought more flexibility in coming back to the office. Amid a hot job market and a shortage of skilled workers, a growing number of companies have rolled back plans to require employees to return and have instituted flexible work policies.

Financial firms and the billionaire fund managers who run them, however, have a different set of rules, according to people familiar with the culture in that rarified segment of the investment market.

"In the larger corporate world, there will likely be a match between some employees that want to work remotely and employers that are fine with it," said Ben Friedland, a vice chairman at the real-estate-services firm CBRE who specializes in leasing high-end office space to financial-services tenants. "At the higher end of the market, principals feel the collaboration and idea generation that takes place when physically together is critical, and there is an expectation for those people to return."

Providing top-tier spaces with soaring views, amenities, and health-related aspects like filtered air and ample light is part of the enticement these firms are spending on to draw workers back.

"These guys are masters of the universe," one leasing executive quipped. "They're not going to let COVID have an impact on them. They're above that."

Financial firms are a bright spot in an otherwise slow office market

The deals signify a burst of activity in an office-leasing market that has otherwise been moribund. About 6.35 million square feet have been leased in Manhattan since the start of 2021, according to data from CBRE, putting the year on pace for an activity total that's a fraction of totals before the pandemic; in 2018 and 2019, for instance, 32.4 million and 31.6 million square feet were leased in Manhattan.

Some tenants have been reluctant to make office-leasing decisions as questions loom over whether remote work will become a fixture and whether it may allow some firms to reduce their footprint as fewer employees come into the office every day.

But some top-tier financial firms feel confident in their business and see a return to the office as key to their continued success, making them more willing to commit to space. The vacancy rate in a collection of 200 higher-end office buildings in Manhattan tracked by CBRE was 11.8%, less than the 13% vacancy rate across the market.

"Most of these financial firms view the office as a necessity," said Steve Durels, an executive vice president at SL Green, which codeveloped One Vanderbilt. "What has crystallized in the minds of investment managers is the office is an extension of their brand, a way for them to create a company identity."

Durels said he could not comment on the firm's recent deal with Stone Ridge.

The deals also show that while financial companies have sought to open offices in other areas of the country, such as South Florida, many will seek to not only retain but expand their presence in investment hubs like New York.

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