As Jane Street’s lawsuit against Millennium and two former employees shows, Wall Street’s most profitable trading machine isn’t keen on letting its secrets slip out. However, it has begun in recent years to supplement its capital with some debt, and lenders now expect at least some disclosure. Thanks to MainFT’s Eric Platt, Alphaville has now got its mitts on the bond prospectus for its latest $1.25bn bond sale. It’s fascinating stuff and sheds some light on one of Wall Street’s hottest players. We won’t upload the whole thing though: we checked it for watermarks and scrubbed its metadata, but Jane Street is paranoid and publicity-shy enough that they might have inserted a few subtle changes in different docs to see if anyone leaks it. But here are FTAV’s main observations from the prospectus.
Julien Pelegri
2mo
Very interesting insights, thanks 🙏🏼
A remark based on what is in your article: I was wondering if all the long / short in massive size they have in bonds was going through PBs. I couldn't see how it could be different. My experience has been that the best PB clients can get a better treatment than the some of the trading books on the floor of the bank itself. This in itself means if as the article implies most business goes through PB financing that the banks which have lost market share on trading have potentially nurtured a competitor by giving it better conditions than their own traders. I don't know if that's the case, I just have this impression reading you and having sat on buy and sell side. I can see how that would work if you had better funding conditions and you didn't inherit what a bank already has but could start a business from scratch centered on ETF long/shorts. It's also a Delta1 business so in theory is initially simpler. The initial issue the banks had was they had plenty of departments and each instruments can have its own ETF and they'd have expected to do that next to each trading desk whereas Jane started with the ETF rather than having to create it on top of an existing infrastructure for each instrument.