Multi-strategy funds are building energy capabilities at pace. Balyasny, Citadel, Verition and Millennium are all actively expanding, and at Laz Partners, covering mandates across trading houses, utilities and banks, the same question keeps coming up: which profiles actually make the cut, and why.
1. What they are actually looking for
The physical book, the origination relationships, the asset-backed work you have done at a merchant or major is not what fund BD teams care about. What they want to know is whether you can generate your own conviction on price, independently, based on your own market read. If a significant part of your P&L came from your employer’s physical infrastructure or asset access, this is probably not the right environment for you.
2. VAR discipline
Fund risk structures are tighter than most merchant environments. Before pursuing a fund seat, ask yourself a few honest questions:
- How often do you approach your daily limits?
- When you draw down, how quickly do you recover?
- Have you been stopped out before?
At a trading house, a difficult quarter rarely costs you your seat. At a multi-strategy fund, a sustained drawdown or pattern of breaching limits typically does.
3. Financial expression of fundamental views
Funds want traders who can size a view, structure it and manage it within a financial risk framework. Translating a view on gas, power or oil into derivatives or options structures is the baseline. That framework needs to also work across different market environments and be repeatable and scalable.
4. The profile that succeeds
The candidates who demonstrate all of the above consistently are the ones who advance. From our conversations with multi-strategy BD teams, a few other things matter too:
- P&L bar: €10m in liquid energy over multiple years is the floor, with €15-25m in consecutive pure prop P&L across at least three years puts you ahead of the field.
- Your own process: the expectation is that your tools, models and trade ideas need to be yours, built or adapted by you and portable to a new environment, not dependent on your current desk infrastructure.
- Source hierarchy: multi-strats prioritise candidates from other funds first, then major merchants such as Trafigura and Mercuria, then top performers at energy majors such as Shell and EDF, then leading banks.
We are currently working on mandates in this space: a senior European power PM or trader with at least three consecutive positive years, and a crude oil mandate for traders with meaningful P&L in US or Dubai Brent.
