Jane Street’s sneaky retention tactic
It involves the use of an obscure, French programming language
Hedge funds will go to great lengths in pursuit of profits, whether it is by counting cars in satellite photos of parking lots or shipping gold across the Atlantic. Building a compiler—a piece of software that turns human-written code into programs a computer can execute—for your homegrown language? That still raises eyebrows.
Jane Street is the quant shops’ quant shop, and it does just that, with great success. Last year its trading revenue almost doubled, to $21bn, putting it on a par with giants such as Citigroup and Morgan Stanley. And the goose that lays the golden egg is its tech system.
But it is what this system is built from that is really unusual. Other firms employ a hotchpotch of programming languages, allowing staff to choose the right one for the job. At Jane Street almost everyone works in an obscure tongue developed by French academics: OCaml. Ask a trader at the firm for its benefits and they will reel off a string of features, such as its support for static typing and functional programming, that make it hard to learn but powerful when applied to a problem. The company says the language helps “maximise the productivity of each person we hire".
OCaml has other, less widely appreciated benefits, too; ones that the company’s communications department might not wish to publicise. Jane Street began to rewrite its core systems in OCaml in 2005. It has since become so addicted to the language that this month it announced its own variant, a fork called OxCaml (no reference to England’s great universities intended). The fork’s modifications make it easier to use the language for very precise coding, where efficiency has high importance.
Other languages may have bigger communities that provide open-source software on which to draw, but the smaller group of OCaml users imposes rigour on Jane Street’s coders. Rather than using off-the-shelf solutions, they must write a tool suited to the job at hand. And Jane Street’s influence on the community means that its tasks often take priority when resources are scarce.
There is one other advantage, darkly muttered about by traders. Jane Street is unusual in the lack of restrictions it imposes on departing staff. Other funds often prevent workers from signing on with competitors for two years after leaving—a length of time that is steadily creeping up. The trend is a boon for charity boards, university economics departments and the gardens of Connecticut and Kensington.
For Jane Street’s technical rank-and-file, particularly the many hired straight out of university, non-compete agreements may be surplus to requirements. A scan of jobs listed by Millennium, a rival fund that has recently clashed with Jane Street in court, shows the strength of the latter’s position in the job market. Millennium wants engineers experienced in C++, Go, Java and Python, languages that are commonly used across finance and tech. OCaml developers, it seems, are Jane Street’s to keep.
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