From Bloomberg, March 11:
When Alex Goldstein was just 7 years old, he says, he was drawn to extreme weather. Within 10 years, he convinced his father to take him storm chasing and hasn’t stopped since.
Now, at 35, he leads a small group of data scientists and meteorologists who help teams of traders at one of the world’s largest hedge funds position themselves in commodities markets.
Millennium Management’s Goldstein and other specialists like him who can help model weather patterns in an increasingly volatile climate have become one of the most sought-after groups for hedge funds and trading firms.
They’re not your typical hedge fund employees, like traders who easily expect to make $1 million by the time they’re in their mid-30s. If they weren’t at hedge funds, many weather experts would make a fraction of that amount working in a less adrenaline-fueled environment such as a university or federal agency.
Squarepoint Capital, Jane Street and DV Trading are among the firms that have recently hired weather experts, while Millennium and Balyasny Asset Management are beefing up existing units, people familiar with the matter said.
Commodities trading is heavily influenced by the weather, particularly for natural gas and agricultural commodities including coffee, cocoa and grains. This year, record-breaking cold weather in the US sent natural gas futures surging, while Arabica coffee futures hit a record fueled by worries about bad weather in top grower Brazil. While weather volatility can disrupt people’s lives, it can mean big money for hedge funds that capitalize on rapid price shifts in commodities.
The pool of potential candidates for weather-related jobs at hedge funds has deepened in recent weeks. Massive job cuts and budget uncertainty at federal science agencies mean many more weather scientists are looking for jobs. Indeed, the pivot to hedge funds is poised to accelerate, according to interviews with a half-dozen people in both the private and public sector.
Hedge funds on average hired 23% more weather experts, including data scientists and meteorologists, in 2024 compared to a year earlier, according to executive search firm Proco Group. The average pay package has also increased by 18%, with the top talent getting as much as between $750,000 and $1 million.
That compares to a median salary in 2023 of about $93,000 for atmospheric scientists, including meteorologists, according to the US Bureau of Labor Statistics.
“Academic meteorologists, with strong data science skills, who can translate their skills into the commodity trading environment, are one of — if not the most — sought-after skill set,” Proco Group senior partner Ross Gregory said.
Squarepoint recently hired two weather scientists — including a longtime climate data expert focused on machine learning models — and has at least a half-dozen experts on its weather team, people familiar with the matter said. Jane Street and Balyasny also hired weather scientists last year....
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