While investments by Abu Dhabi and Qatar’s sovereign-wealth funds helped Barclays avoid a government rescue during the 2008 financial crisis, it must increase holdings of safe assets to meet new capital adequacy requirements.
The bank built its commodities business by hiring from Brevan Howard Asset Management LLP, a $36.7 billion hedge fund, Morgan Stanley and Enron Corp., the U.S. energy trader that collapsed in 2001, to take advantage of an almost four-fold increase in raw materials prices in the past decade, as measured by the Standard & Poor’s GSCI Spot Index.
Barclays joined the top firms in commodity derivatives last year, matching Goldman Sachs and Morgan Stanley in the share of clients who use them for over-the-counter trading, according to a Greenwich Associates survey of corporate treasury officials that was published in March.
In energy derivatives, Barclays, Goldman Sachs and JPMorgan Chase & Co. each had 41 percent market penetration and Morgan Stanley had 37 percent, according to the research, carried out between September and November.
The gains preceded the 33 percent slump in revenue from banks’ commodity units in the first quarter, according to data compiled by Coalition Development Ltd., a London-based research company with offices in New York, Singapore and Mumbai. The decline, to $2 billion from $3 billion a year earlier, was due to lower volatility, reduced client trading and weaker natural- gas prices, Coalition said in a June 1 report.
U.S. gas slumped 29 percent in the three months through March and reached a 10-year low of $1.902 per million British thermal units in April this year. The S&P GSCI index dropped 13 percent in the second quarter, the most since 2008.
Jones, 47, who joined Barclays from Deutsche Bank AG in 2002 and became head of commodities in 2007, left in May for Mercuria. The firm opened in 2004 and is now among the five largest independent traders of crude oil, natural gas, coal, biodiesel and carbon emissions, according to its website. It also owns oil reserves in Argentina, Canada and the U.S., and bio-fuel plants in Germany and the Netherlands.
He followed Sutterby, who had been at Barclays for nine years until March 2011, gas trader Aaron Hudswell and power trader Julian Cowking, who joined Mercuria a year ago, according to the people, who asked that their names not be used because the information is private. Carsten Hansen, the European head of energy sales, departed in April after coming from Enron in 2002.
Ulf Ek, 40, who previously bought and sold at power hedge fund managers Brevan Howard and Amaranth Group Inc. and Enron, left in September and is now an independent trader, according to a person with knowledge of his career. Nordic power trader Thomas Nilsson, 38, joined Freepoint, a Stamford, Connecticut- based trader of commodities, in November after three-and-a-half years at the lender and four years at Nuon Power Generation BV, a unit of Vattenfall AB, the Nordic region’s biggest utility.
Neil Jackson, 36, head of European gas and power trading at the bank and a former Enron employee, started a family investment company in March. Denis Bajolle, 40, joined Hong Kong-based Noble Group as head of non-Nordic power trading in June 2011 after almost 10 years at Barclays.