Rookie traders earning as much as $541,000 in Sydney

 SYDNEY – Graduate traders are earning salaries of as much as US$400,000 (S$541,000) straight out of school.

But this is not New York, London or Hong Kong. It is Sydney, where firms including Citadel Securities, IMC Trading and Optiver have established bases and hired rapidly, and plan to employ even more. Elite recruits with maths and science backgrounds can command up to that amount, people familiar with the matter said.

Sydney has become an unlikely Asia-Pacific hub for tech-driven trading companies, a part of finance that is bucking the global trend of layoffs and pay cuts. Observers say the city has attracted the high-paying roles, thanks to a university system that churns out candidates who adapt well to the business, favourable tax policies and a long history in the trading industry.

“Trading firms offer extraordinary grad salaries,” said Mr James Meade, head of employability at University of New South Wales (UNSW) Sydney, one of the country’s top universities. 

Over at Wall Street, bleak expectations for bank executive bonuses are proving true as a slump in dealmaking ends the industry’s war for talent and firms regain the upper hand in setting pay. Companies including Goldman Sachs and Citigroup are cutting staff. Technology giants such as Amazon.com and Microsoft are also eliminating thousands of jobs.

Only a fraction of graduates in Sydney start on US$400,000 salaries, and some of the market-makers do not pay that much. Wall Street banks, meanwhile, offer base wages of around US$100,000 to US$120,000 for an analyst, according to data from Wall Street Oasis.

Optiver pays as much as A$250,000 (S$223,000) plus bonus to a fresh quant researcher, according to jobs website Prosple. Most graduate programmes at trading firms in the city give salaries of more than A$200,000, said UNSW’s Mr Meade.

At Optiver, perks include gym memberships, massages and in-house chefs cooking free food. IMC added an in-house kitchen and a barista team in 2023.

The hiring spree is focused more on becoming a hub for regional markets than building capability for Australia itself, with the timezone proximity allowing traders to cover Japan, South Korea and other large Asian markets.

The market-making industry is booming globally, and companies are recruiting outside Australia too. It is possible to get similar salaries in some other markets, but what is different is that some of the firms have made Sydney their Asia-Pacific hubs, home to most of their regional employees.

IMC, which employs more than 1,300 people, has been in Sydney since 2002 and now counts the city as its Asia-Pacific headquarters. Around 90 per cent of its more than 300 employees in the region are based there. It is planning to add about 60 graduates in 2023 in trading and technology across Asia-Pacific, according to Mr Matthew Benney, acting managing director for Asia-Pacific.

While Citadel is boosting hiring in Sydney, Hong Kong remains its hub for Asia-Pacific. The American market-maker, founded by billionaire Ken Griffin, may increase headcount in Australia by 50 per cent to 100 per cent over the next two years, according to Mr Matt Culek, its chief operating officer. The company has more than 60 people in Sydney.

Optiver has most of its roughly 500 Asia-Pacific employees in the city. It has been hiring its biggest numbers of graduates and interns in the past few years, according to Mr Tristan Thompson, head of trading for Asia-Pacific. Still, growth in the region is fastest outside Australia, he said.

Sydney traces its roots in the computer-driven trading business back to the 1990s, when Australia’s stock exchange had one of the biggest options markets in Asia-Pacific, which helped entice firms to the city. Tax breaks on offshore trading revenues, which are in the process of being phased out, also contributed.

Sydney is also a major forex trading hub, and Macquarie Group, which is based in the city, has a longstanding trading business that helped its profits hit a record in 2022.

The market-making companies have benefited from a flow of maths, science and engineering graduates from the top universities, such as the University of Sydney, UNSW Sydney and the University of Melbourne. Traders say graduates hired from Australian schools excel at handling the kind of issues they face in the job.

Additionally, the city’s sunny weather, beautiful beaches and strong quality of life meant experienced traders were also happy to move there.

At Optiver, even the boss went surfing before work.

“My schedule was to get up quite early, be in the water around 6am,” said Mr Paul Hilgers, who was its global chief executive, now an investor and consultant. “Go home and grab a coffee, get on my scooter and ride over to the office. I still miss it.”

While Sydney is booming in market-making, it still lags behind other parts of Asia as a financial hub. It ranked 13th in the latest Global Financial Centres Index. Singapore and Hong Kong were third and fourth respectively. But Citadel’s Mr Culek says the city is on the rise. “Sydney is being viewed globally as a fantastic place to live and grow and build a career,” he said. BLOOMBERG