Hedge funds, including Millennium Management, Citadel, Balyasny Asset Management, and Squarepoint Capital, are increasingly recruiting meteorologists and climate data scientists as extreme weather events drive volatility in commodities markets, according to a report by Bloomberg.
Since 2014, climate-related disasters have caused over $1.4tn in damage across the US, adjusted for inflation, according to the National Centers for Environmental Information. As these disruptions inject volatility into commodity markets and disrupt, hedge funds have capitalised.
Executive search firm Proco Group reports a 23% uptick in hedge fund hiring of weather scientists in 2024, with compensation packages up 18% year-over-year. Top specialists are now securing pay packages of $750,000 to $1m – far exceeding the US Bureau of Labor Statistics’ 2023 median salary of $93,000 for atmospheric scientists.
Citadel, Ken Griffin’s $66bn multi-strategy powerhouse, was an early mover, hiring the head of weather-focused trading firm Cumulus in 2018 along with roughly 20 traders and analysts. The firm now boasts a team of about two dozen weather specialists supporting its commodities strategies.
One of Citadel’s key hires, Nicholas Klingaman, is a noted expert in sub-seasonal forecasting, tropical meteorology, and climate modelling. Another, Nick Weber, holds a PhD in atmospheric sciences and previously worked as a visiting scientist at the National Center for Atmospheric Research. Their predictive capabilities have been instrumental in Citadel’s commodities division, which has generated around $4bn annually for the past three years, largely from natural gas trading.
Millennium, too, has invested heavily in meteorology. The firm’s weather team – numbering between five and ten specialists – serves as a centralised resource for its commodity trading pods. Goldstein, who once used NASA’s models to analyse rapidly intensifying winter storms, now applies his expertise to predicting disruptions in natural gas markets.
Squarepoint recently onboarded two weather scientists, including a leading expert in climate-focused machine learning models, adding to its team of at least six specialists.
DV Trading, one of the largest liquidity providers in oil markets, recently hired a former NOAA meteorologist with a PhD in atmospheric science. The firm has even established an internal real-time weather forecasting channel for traders, according to sources.
Jane Street and Balyasny also expanded their meteorology groups last year, according to people familiar with the matter.
