Hedge funds including Citadel, Balayasny, and Qube, are accelerating their push to add Asian power market traders lured by surging volatility and structural opportunities in deregulated electricity systems across Japan and Australia, according to a report by Bloomberg.
Once dominated by oil and gas, commodities trading desks are being reshaped by the evolving global energy landscape. With traditional markets generating diminished returns and less price movement, power is emerging as the new frontier, particularly in Asia-Pacific’s liberalising and disruption-prone markets.
The report quotes Ailing Huang, Executive Director at Kerry Consulting in Singapore, as saying: “Hedge funds have been very active in hiring for commodities trading.
“They’re guided by where volatility is highest and markets are most active — and right now, that includes electricity markets in Japan and Australia.”
Australia’s power market has seen volatility spike due to infrastructure constraints, outages at ageing coal-fired plants, and sharp swings in renewable energy generation. In Victoria, 30-day power price volatility reached nearly 500% last year – far outpacing levels seen in European natural gas.
Japan, meanwhile, has witnessed explosive growth in electricity derivatives trading, with volumes on the European Energy Exchange AG (EEX) quadrupling in 2024. Physical market activity is also rising, driven by the country’s post-liberalisation energy reforms and uncertainties surrounding nuclear restarts and renewable integration.
That volatility – a key source of alpha for commodity-driven hedge funds – has sparked a hiring spree. Multi-strategy firms including Citadel, Balyasny Asset Management, and Qube Research & Technologies are expanding their power trading capabilities in Asia, while Jain Global recently brought on Liam David in Singapore to cover Australian electricity.
Citadel, for its part, recently hired Hironao Sakata — the former head of Japan commodities sales at Morgan Stanley MUFG — as it deepens its exposure to Japan’s power markets. The fund previously acquired a local firm to bolster its regional platform.
