(Bloomberg) — Hedge funds including Balyasny Asset Management and Squarepoint Capital Llp are scooping up traders and analysts who specialize in natural gas and power as volatility in those markets creates opportunities to profit.
Balyasny hired Joe Constantinou, previously a power trader with Bank of America Corp., while Squarepoint hired Ben Chu as a quantitative researcher focused on gas, people familiar with the moves said. BlueCrest Capital tapped Chase Allen, who will start in September in Austin, the people said. He previously led North American trading at Trailstone Group, with a focus on power markets, according to his LinkedIn profile.
Balyasny and BlueCrest declined to comment, and Squarepoint didn’t immediately respond to a request for comment.
Hedge funds and commodity merchants are piling into power and natural gas markets as a rapid rise in renewable-energy output, creaky grids and increasingly turbulent weather contribute to wilder swings in electricity prices. Hartree Partners LP has hired several traders to build out a physical power business in the US, while Balyasny is setting up a unit to trade physical natural gas and power in Denmark.
Earlier this year, Squarepoint also hired Jason Coy as a quantitative researcher. He was previously the head of Americas gas and power trading at Exxon Mobil Corp., according to his LinkedIn profile. The fund also hired Christopher Dismuke, another natural gas trader, from Exxon.
While spikes in volatility can create avenues to rake in profits, it can also burn firms that get caught wrong-footed. Hedge fund e360 Power, which trades US power and related energy markets, suffered one of its worst-ever losses last month.
Brevan Howard Asset Management has expanded its commodities team under Elycia Sherman to five, including Geneva-based gas trader Robert Alpen. Another portfolio manager is on course to join the team this year, according to a person familiar with the matter.
Squarepoint also hired Devin Magnuson to focus on global oil for discretionary trading, the people said. He was previously a senior analyst at Citadel.
Hedge funds have expanded into energy and commodities markets as a whole in recent years as wars upended trade flows, injecting volatility and price dislocations into otherwise sleepy corners of the market. Profits at many top firms surged to new highs in the last two years. Citadel’s commodity-trading business made more than $4 billion in 2023, Bloomberg reported.
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