Morning Coffee: Ex-Goldman Sachs analyst now having a hard time at a hedge fund. JPMorgan M&A banker encouragement

Hedge fund life can be hard. If you're not at a multistrategy firm like Millennium, which has a reputation for ejecting portfolio managers who lose more than 7.5%, you might be at a smaller fund with volatile returns. Just ask the employees of Pierre Andurand or Chris Rokos.

In the latest hedge fund hardness, two firms are finding the terrain particularly intractable: Lone Pine and Arini. 

Lone Pine, which runs an equity long-short strategy, was up 43% in the first half of the year. But Bloomberg reported that Lone Pine then lost 30% in the third quarter and the WSJ is reporting that Lone Pine lost another 8.8% in October and was then down 7.5% before fees for the year even before last week. Both the sharp reversal in AI stocks and souring short bets reportedly turned against it. In the first half, Lone Pine said its short book was the main contributor to returns.

It's a difficult time, then, to be Rahul Anne, who was appointed co-chief investment officer at Lone Pine in only September. Anne, whom we estimated to be in his late 30s was briefly an investment banking analyst at Goldman Sachs. Then he went to KKR for two years. Then he joined Lone Pine in 2016. 

Anne's is therefore the fantasy career path. Now he's in a non-fantasy situation. Another longer-standing Lone Pine co-CIO, Kelly Granat, left to join a tech investment firm in September, leaving Anne holding the rudder with the other co-CIO David Craver. Fortunately, Craver has been there nearly 30 years and founder Steve Mandel is also lurking in the wings. Mandel said last year that unlike the large multistrategy firms, Lone Pine is engaged in deep research and "true price discovery" whereas multistrategy firms are simply trying to establish which securities will beat others over a short period. Anne needs to hope that the prices discovered turn out yet to be correct.  

Arini's hard time and new hubristic-seeming office have been noted already. Bloomberg reports that the fund, run by 36-year-old Hamza Lemssouguer is now down 32% on the year.

In a letter to investors, Arini is reportedly blaming the dislocation in CCC-rated credit and "targeted shorting at uneconomic levels," which might imply other firms betting against it. Arini's investments have unfortunately ended up being highly correlated and Arini - which stands by its "core theses" now plans to build in more diversification. 

As the tide goes out, people have been pointing to a pitch to an investment committee Lemssouguer made in August 2025, in which he emphasised the importance of good portfolio construction. Bloomberg reports that the five largest positions at Arini's Master Fund now account for two thirds of its net asset value. Arini is sticking with them. In a recent investor letter, it said: “Mark-to-market volatility of this kind is inherent in a concentrated, contrarian mandate. The fund has the structural duration of capital to see these investments through to their catalysts.” 

It's not easy being Anne. It's harder being Hamza. In last year's pitch Hamza said he hires carefully and that out of about 50 investment professionals recruited, only two had left in four years. His US CEO Gavin Yates left for Citadel last August. So far the rest seem to be waiting around for the catalysts to come through. 

Separately, market turmoil might seem bad for M&A but this is not so according to Kevin Foley, co-head of investment banking at JPMorgan.

Speaking to Bloomberg, Foley said clients considering M&A deals need to push onwards. “The biggest risk may be assuming that, sooner or later, things go back to normal,” he declared. “Standing still is always an option, but when industries are changing this fast, it’s the wrong one.” 

Fernando Rivas a senior banker at Wells Fargo is reportedly taking an even harder line and saying it's "now or never" for big deals. Hopefully clients are listening. 

Meanwhile...

Two Millennium credit trading pods are closing. Dominick Maggio and Amit Agrawal, who ran Abacove Capital are leaving. So are Mark Meenan and David Ulrich, who ran a pod called Twin Lights. (Bloomberg) 

Anthropic is still planning a pre-Thanksgiving IPO but now it might be at a valuation of $1.25tn-$1.75tn instead of $2tn. (FT)  

Bank of America is combining its global credit macro, fixed income exchange-traded fund, and high-grade corporate bond trading businesses into a single platform. (Bloomberg) 

Jane Street's software engineering interviews are changing. "They involve less code-writing, and lean more higher-level, focusing on software design, on verifying the quality, structure, and intention of code, and on using LLMs to produce code." (Jane Street)

Neil Sethi had 30,000 followers on X. Then Bank of America accused him of posting some of its data without permission. X pulled his account and it's been closed to him ever since. (Bloomberg) 

Shemara Wikramanayake, the outgoing CEO of Macquarie Group, says being called a "millionaires factory" implies "a factory that produces millionaires — but also a place where millionaires work around the clock like they’re in a factory, in a sweatshop”. She says she's enjoyed working 13 hour days. (The Times) 

Mike Platt is suing his barrister Malcolm Gammie. An approaching trial will consider whether Gammie acted negligently by not advising Platt to use Swiss tax residency arguments during his recent legal dispute with HMRC. (CityAm)

UK companies must now let unions approach their staff. “Each week, the GMB will provide one item of union information (for example, a message, bulletin, short video, poster or link). The employer will distribute it, in full and in a stand-alone format, to all workers.” Companies are not allowed to monitor who clicks the email. (The Times)