Hedge Fund Verition Adds Energy Traders in Tough Year for Market
(Bloomberg) -- Hedge fund Verition Fund Management is hiring in energy, going against the grain in a year when many traders have struggled to make money.
The US firm has seen assets rapidly swell to $13.7 billion since the start of the decade. That’s given it room to expand across strategies, including commodities — one of the more volatile corners of global markets. Verition has hired about 10 high-profile traders across key locations during the past year and opened a Houston office in April, according to people familiar with the matter.
Energy markets have calmed since the record volatility of the recent crisis years. For some multistrategy funds, the lull offers a chance to hire talent at a lower cost and build positions ahead of a rebound. At the same time, electricity trading is drawing fresh interest as artificial intelligence fuels a new wave of power demand.
Verition is growing from about three commodity trading pods to six, one of the people said, asking not to be identified discussing private information. The Connecticut-based firm, which has 160 teams investing across asset classes, currently has about 3% risk exposure to commodities, the person said. That’s well below most rivals, including Citadel and Jain Global.
Most of the new hires will focus on power markets, with the firm also trading oil, commodity volatility, soft commodities and natural gas, according to the people.
Verition declined to comment.
The company’s move comes at an inflection point for the market. Traders saw record profits with top firms raking in billions after Russia’s invasion of Ukraine triggered a global energy crisis and record volatility.
But 2025 is not 2022. This year marks a reset in the energy market — not because prices have stopped moving, but because the volatility has shifted. Oil majors and commodity houses alike have struggled to find profits as headline-driven swings, fueled by geopolitics and policy changes, prove harder to trade around.
Verition’s commodity hiring still pales in comparison to the numbers of traders it’s snapped up in other broad strategies such as equities, credit and fixed income. The firm has also been growing in niche areas such as special situations, Canadian convertibles and litigation option trading.
Talent Pool
Despite the headwinds, some see Verition’s appetite for commodity traders as savvy. This year’s slowdown has made top talent more accessible — in what’s usually a fierce battle for multistrategy traders.
“We’re now seeing a lot of traders looking at commodity markets with a bit more of a clear head-space,” said Mark Taylor, managing partner at headhunter Imperium Commodity Search. “The market has stabilized a bit and that gives firms a bit more time to really evaluate what they’re doing and who they’re going after.”
In Houston, Verition is adding James Hutchinson from Millennium Management and Gregory Galimberti from TotalEnergies SE’s trading arm to trade refined products, some of the people said. In December they’ll join portfolio manager Keith Leung, who trades commodity volatility. The firm recently poached a few traders from Beaufort Energy in London, including founder David Brookes and Aloys Buisson, several people said.
Verition has also brought in Alex Mouturat from Millennium to build an energy team in Dubai focused on European gas, power, carbon and oil, Bloomberg News reported in September.
Rivals’ Growth
Other hedge fund giants have focused on expanding their commodity businesses by building out physical arms. Jane Street, Jain Global, Qube Research & Technologies Ltd. and Balyasny Asset Management LP have joined the likes of Citadel to trade physical raw materials.
Verition, by contrast, is steering clear of the physical market, focusing instead on financial instruments such as swaps and derivatives, some of the people said. That approach aligns with its roots as a fund more attuned to market dislocations than to logistics-heavy trades.
Verition co-founder Nicholas Maounis has a memorable history in commodities. In 2006, Maounis’ Amaranth Advisors collapsed after mammoth natural gas bets backfired. One trader invested more than half of the firm’s assets. The resultant losses — $6.6 billion — represent one of the most infamous hedge fund implosions in history.
Two years later, Maounis founded Verition with Josh Goldstein. The firm ran about $1 billion in assets before the pandemic and hired its first commodity trader six years ago. Assets have increased 13-fold, fueled by investor demand for multistrategy funds that deploy independent pods of traders across asset classes.
Next year is likely to bring more normalization in energy markets, pressuring smaller funds to decide whether to stay the course or pull back, said Anders Porsborg-Smith, a managing director and senior partner at Boston Consulting Group.
“There’s a winner-takes-it-all dynamic in some of these markets, where the top 10 will probably extract a far outsized share of the total profit pool,” he said. “If you really want to build a competitive edge across cycles, you want to be structurally part of the business.”
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