Morning Coffee: JPMorgan's most patient man says now's the time. Hedge fund intern had Tom Ford silk underwear

One of the problems with working for a multistrategy hedge fund is that you're expected to put money to work, even when doing so fills you with dread.  "The big pod shops want you to run 65%-70% of your risk budget every single day," one trading veteran informed us last year. Life is different when you work for JPMorgan Asset Management.

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There, Bill Eigen head of the absolute return and opportunistic fixed income team at the bank's asset management arm, has spent the last three years mostly watching and waiting. HE's been hoarding cash and making a shopping list. Sometimes Eigen appeared on CNBC to scoff at people who thought he should be deploying his enormous capital pile. The hoarding served him well: in 2022 he made a gain of 0.5% against a Bloomberg aggregate index loss of 15%; in 2023 he had $8.8bn of which 63% was in 'cash-like instruments.'  It's 2025 and Eigen's patience has paid off: he now has $10bn; 47% is cash, which he's ready to put to work. 

“I’ve been pretty busy here,” Eigen tells Bloomberg. “My shopping lists are finally starting to turn green a little bit, instead of being all red all the time.” 

At JPMorgan Asset Management, Eigen has the sort of remit you might see in a hedge fund, but without the relentless pressure to deploy risk. He can invest across the credit spectrum, with few constraints. Until recently he's avoided high yield, but times have changed. 

With high yield new issuance at a halt and the credit market only likely to see more pain, Eigen thinks there will be panic selling of existing high yield bonds and "opportunities for people with liquidity to take advantage." It made little sense to invest in high yield in the past few years because the market was priced to perfection, says Eigen. Now, there are yields of 9%. "That's when I start to get interested," 

Eigen has been in the game around 35 years after starting at Fidelity in 1994. He doesn't wear a gilet. He grew up in a working class household and is a man of the people. Eigen likes repairing and flipping cars and owned three car repair facilities in Boston. He now owns an athletics facility and uses that to help gauge what's going on in the real economy. For the moment, Eigen says his customers are still spending on athletics, but his costs are rising dramatically. Hedge fund managers may want to take heed.

Separately, Bill Eigen does not look like a person to wear Tom Ford underwear, but others without his self-restraint, are. 

The Cut spoke to a PhD student and former hedge fund intern, who racked up $35k in credit card debt during a difficult time of life. "I was dealing with a full-on addiction to shopping, an addiction to the high I got from spending money," he says. "I was suffering from pretty severe mental illness. I have bipolar disorder, and in my case, it led to episodes of extreme spending."

That spending included Tom Ford silk underwear, jewellery, clothes and shoes. Eventually, the PhD got help and medication, paid off his debt and now restricts himself to spending $150 a month. It's not easy, though: "My partner and all his friends work in finance. I was constantly being exposed to people who were making $200k, $300k, $500k a year. When those people are in couples, they have huge amounts of money, and they really couldn’t grasp my financial situation at all...."

Meanwhile...

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Job cuts are coming to banking. "Planned RiFs (reduction in forces) never happened in December because banks wanted to retain dealmakers for the expected bounceback in activity. Lists of people to be cut were made then, and now they’ve been brought forward again. There remains significant scope to cut at the senior end, particularly in the US.” (Financial News) 

It's a fine time to work in equity derivatives. At the start of the year, many investor portfolios were positioned for “American exceptionalism” trades to continue or accelerate. Now they're trying to hedge their exposure instead. (WSJ) 

Treasury Secretary Scott Bessent says he has a "big toolkit" if needed for bonds and that one lesson from his hedge fund career is “not to look at what happens over a week.” Trading history is “the scar tissue that sticks with you,” said Bessent, recalling the 1998 bust of Long Term Capital Management. (Bloomberg) 

The simultaneous rise in yields and fall in the dollar suggests a pullback from dollar assets that may reflect mounting concerns about the chaotic direction and implementation of US economic policy. (Financial Times) 

Citadel Securities and Virtu both experienced record trading days in April. (Bloomberg) 

Leda Braga’s Systematica Investments, one of the world’s best known computer-driven hedge funds, is suffering its worst ever losing streak. Its $4bn BlueTrend strategy is down 18.8% this year. (Financial Times) 

XTX founder Alex Gerko's net worth surged to $13.2bn last year. Maybe he will restore some more woodlands. (Bloomberg) 

Wells Fargo hired Christie MacDonald from Bank of America as a managing director in equity capital markets. (Bloomberg) 

People are leaving Kensington and Chelsea for Dubai and Abu Dhabi. (Bloomberg) 

Rich parents are helping children buy $4m apartments in Manhattan. “In areas like the West Village, there used to only be older people who were wealthy. Now, it’s all 20 year olds whose parents bought them a place.” (Bloomberg) 

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