Assessing the Hedge Fund Build-Out in Energy Trading

Over this period, I have seen several cycles of hedge funds moving aggressively into commodities, scaling up trading teams, and later retrenching when market conditions shifted or returns disappointed.

The current wave of hedge fund expansion into energy and commodities feels qualitatively different. Conversations across the market suggest a structural shift, with implications for talent demand that are both immediate and long term.

A Familiar Cycle with Unfamiliar Characteristics

Historically, hedge fund engagement with commodities has followed a predictable pattern. Periods of volatility attract capital and talent, followed by consolidation or withdrawal once returns compress. The post-2008 build-out and the subsequent mid-2010s retrenchment are well known examples.

What distinguishes the current phase is the depth and breadth of investment.

Funds are not only hiring discretionary traders but are building full-stack commodities platforms across power, gas, environmental products and metals. Citadel, for example, has strengthened its European gas and power capability with senior hires such as Tom Nutt in London (formerly of Shell), and Benjamin McRoberts as Head of Power Engineering after a decade at Goldman Sachs. Millennium continues to expand its energy footprint across Houston and Dubai, including hires such as Edward Pisano Ankita Deshmukh from BlueCrest.

Multi-strategy platforms are also investing heavily. Verition has added senior gas and oil talent including David Brookes (formerly Head of Gas Trading at EDF Trading and Citi), and Alex Mouturat from Millennium to build out European energy. Jain Global has been building metals and environmental products capabilities with hires such as Jay McCall from Citadel and Tom Arnold from Millennium. Balyasny has expanded its gas and power presence in Asia and Europe.

These moves illustrate a broader convergence between physical commodity expertise and hedge fund capital, with utilities, merchants and oil majors increasingly serving as feeder pools for buy-side platforms.

What This Means for Talent Demand

Proco Group has become more heavily involved than ever before in supporting hedge funds as they acquire talent. The volume of hiring across trading, research, quantitative analytics and market infrastructure is at an all-time high.

Demand is most acute in three areas:

1. Discretionary traders with proven P&L in power, gas and refined products remain scarce relative to capital deployed.
2. Systematic and quantitative talent is in intense competition, with researchers, developers and engineers with commodities domain knowledge being actively targeted by both funds and merchants.
3. Hybrid profiles that combine fundamental analysis, physical market understanding and quantitative tools are commanding premium compensation and high mobility.

Despite this intensity, a recurring question persists across the market: is this expansion durable?

Institutional memory of previous cycles, where teams were rapidly built and later dismantled, remains strong, yet several structural drivers suggest this wave may prove more persistent.

• Energy transition policies are increasing volatility and complexity in power and gas markets.
• Carbon and environmental products have matured into investable asset classes.
• Advances in data availability and computation have made systematic commodities strategies more scalable.
• Investor demand for diversification has also increased following recent macroeconomic shocks.

As a result, commodities are being increasingly viewed as a core component of multi-asset portfolios.

Unlike previous cycles that focused narrowly on discretionary trading, current fund builds are broader. Teams now include quantitative research, data engineering, physical market specialists, risk infrastructure and technology. This suggests a deeper, more permanent build-out of commodities capabilities.

For talent, this means sustained demand, global mobility and intensified competition between hedge funds, trading houses, utilities and banks. Compensation inflation, relocation incentives and retention strategies are becoming more sophisticated, particularly in London, Geneva, Houston and Singapore.

Conclusion

The hedge fund resurgence in energy and commodities is not unprecedented, but its structure and intent are.

While caution remains warranted, the scale and sophistication of current investment suggest that commodities will remain a priority for hedge funds. Whether this is a permanent shift or an extended cycle will only become clear with time, but the implications for talent demand are already profound.

For a conversation about the topics covered in this article, or to discuss how Proco Group can support your firm’s hiring requirements in 2026, please don’t hesitate to get in touch.

–

Chris Powell

Group CEO

E: chris.powell@weareprocogroup.com

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