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La maison mère de la chaîne italienne reprend en direct la franchise pour la France. Un échec financier pour le groupe de la famille Houzé.

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Inauguré le 12 avril 2019 à l’intérieur des locaux du BHV Marais, en plein centre de la capitale, Eataly Paris devait être le fleuron gastronomique des Galeries Lafayette. Le groupe détenu par la famille Houzé avait alors obtenu la licence exclusive de développement pour la France de ce « restaurant-magasin » qui fait la part belle aux produits alimentaires italiens de qualité. L’ambition affichée ? Séduire les parisiens avec ce concept auréolé de succès dans le monde, et, pourquoi pas, l’étendre à d’autres villes de l’Hexagone. Mais la donne vient de changer. La maison mère d’Eataly vient d’annoncer ce 6 décembre « avoir signé un accord avec le groupe Galeries Lafayette pour reprendre la franchise de sa marque pour la France et exploiter désormais le flagship parisien Eataly Paris Marais ». La raison avancée ? Mieux maîtriser son développement international en propre. « Cette opération nous permet de devenir encore plus forts et de développer davantage nos activités en France », déclare Andrea Cipolloni, patron du groupe italien dans un communiqué. Mais ce divorce s’explique aussi - surtout ? - par le parcours compliqué de l’enseigne en France, où elle n’a jamais connu le développement espéré. Et a finalement coûté beaucoup d’argent aux Galeries.

Selon nos informations, le chiffre d’affaires patinait autour de 20 millions d’euros en 2023. C’est à peine plus que les 16,5 enregistrés dès 2019, et surtout beaucoup moins que les ambitions fixées à 30-35 millions d’euros lors de l’ouverture. Au lancement, on visait aussi, en coulisses, un retour sur investissement en 3 à 4 ans, en espérant multiplier les ouvertures pour écraser les coûts fixes….Malheureusement les pertes, de l’ordre de 3,8 millions en 2023, se sont accumulées au fil des ans, pour atteindre un total de 24,5 millions. En clair, Eataly Paris n’a jamais gagné un euro. Entre le coût des travaux, et 8 millions d’euros remis au pot en 2019, l’ardoise s’est vite alourdie pour les Galeries. Et fin novembre, le groupe des Houzé a dû injecter 23,5 millions de plus en cash pour recapitaliser sa filiale. Histoire de rendre les clés à leur franchiseur avec une entreprise remise sur pied financièrement pour la passation de pouvoir.

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À l’origine, tous les ingrédients étaient pourtant réunis pour poursuivre la success-story de ce réseau créé en 2007 à Turin par le truculent Oscar Farinetti, grand partisan du slow food, et riche d’une quarantaine d’établissements dans le monde. À Paris, le temple de la bonne bouffe italienne s’étale sur 2 500 m2 dans le quartier touristique du Marais, avec une magnifique cave à vins, des espaces de restauration à n’en plus finir, ainsi que des produits alimentaires transalpins soigneusement sélectionnés. Ici, pas de Nutella, de Barilla ou de Martini à l’horizon : ne sont référencés que des marques de PME ou des petits producteurs. Mais moins d’un an après l’inauguration des lieux, le Covid s’installait. De quoi porter un sérieux coup au pôle restauration, essentiel dans le business model, pendant de long mois.

Et ce ne fut pas là le seul problème. « Le concept est super sympa, mais à Paris il souffre d’un manque de visibilité lié à son emplacement dans un enchevêtrement de petites rues, alors que dans le reste du monde Eataly s’installe généralement dans des grandes halles », souligne un bon connaisseur de l’enseigne. Casés dans d’anciens locaux dédiés au personnel du BHV, les différents stands, rayons et espaces restauration s’étendent en effet sur plusieurs niveaux et mezzanines, ce qui ne facilite pas l’exploitation. « Pour l’exécution opérationnelle, ce n’est pas l’idéal. Et cela se ressent sur le bas de page », confie à l’Informé un ancien cadre, qui cite d’autres obstacles au développement : la difficulté d’accéder au centre de Paris, le manque de touristes, ou encore l’absence de zones de bureaux dans les environs, qui pourraient apporter un flot régulier de clients. « Certains week-ends on pourrait doubler la surface sans souci pour accueillir tous les visiteurs. Mais en semaine on pourrait la réduire de moitié. Et les habitudes des Français, qui mangent plutôt à heure fixe à la différence d’autres pays, provoquent des pics de fréquentation entre midi et 14 h 00, et des vides entre-temps. »

La séparation annoncée s’explique aussi par des choix stratégiques des deux partenaires. Certains côté Houzé : après la pandémie, le rachat progressif de la Redoute (entre 2018 et 2022) et le recentrage opéré sur les grands magasins (cession du BHV au groupe Société des Grands Magasins entamée en 2023), les investissements et le marketing dédiés à Eataly ne sont peut-être plus aussi prioritaires. D’autres côté italien. Eataly souhaite à l’avenir une gestion directe de la marque en France, pour mettre en place de nouvelles stratégies commerciales : développement dans les aéroports parisiens (Charles de Gaulle et Orly) et les gares, installation dans « des emplacements stratégiques dans les principales zones urbaines »…

Contactés depuis plusieurs jours, ni Eataly ni les Galeries Lafayette n’ont pas répondu à nos questions.

German stock rally counters European gloom

Dax has enjoyed an unexpectedly strong market performance since the US elections

The gloom around investing in Europe after the re-election of Donald Trump as US president is profound, unavoidable, depressing, and maybe a little misplaced.

Sad connoisseurs of the year-ahead investment outlook season among investment banks and asset managers (fine, I’m guilty as charged) know the consensus at this point is truly overwhelming and bracingly simple: buy US. Keep buying US. Believe in the US exceptionalism story. Not only is the US firing on all cylinders but Europe is a mess. It is very hard to argue against this, and from what I can tell, few are even trying.

The message from Swiss bank UBS, for instance, is that European stocks are likely to head “sideways” in 2025. Take that for a rallying call.

And yet, the inconvenient truth is that one of the best-performing stock markets in the world since the US election is Germany. No, seriously.

The Dax 40 index has rocketed over the past few weeks, cracking above 20,000 for the first time in history. It is up 7 per cent since US election day a month ago (time flies), with a particularly notable acceleration since the final days of November. The US market has grabbed all the attention, and that’s reasonable, given the S&P 500 index of US blue-chip stocks stands at a market capitalisation of $51tn, against the Dax’s €1.4tn. It just matters more. Still, the post-election jump in the German market is only a shade behind that of its much bigger US cousin and outstrips European peers.

What’s going on here? “It’s hard to know exactly why” this is happening, says Gerry Fowler, head of European equity strategy at UBS. But he says it comes down to a few companies in the index.

He’s right, of course. Top of the list is Siemens Energy, up 35 per cent in the past month. Just behind it is Rheinmetall, the arms group, which is up 32 per cent in the past month. In the following pack we have online retailer Zalando up 29 per cent and auto parts group Continental, up 17 per cent.

This is a useful reminder of a few things. One is that when investors decide as a pack to shy away from a particular sector, it doesn’t take much buying to send individual stocks or national indices soaring. 

Fowler points out that across Europe, stocks with strong links to China have been outperforming of late. Some brave investors out there may have come to the conclusion that things can only get better for the Chinese economy after a rough year, and Europe is a good place to reflect that view.

Another is that immediately after the razzle-dazzle of the US election, Germany itself fell in to political hot water. Early federal elections have now been called for February and the debate is heating up over whether Germany should loosen its long-standing resistance to more generous borrowing and fiscal spending. “There’s hope that the German election might bring about change,” says Fowler — on deficit expansion and on broad corporate strategy, especially in the crucial autos sector. 

On the margins, some other factors may be at play here. France’s loss is Germany’s gain, for instance — its political malaise has punished its stocks more heavily. Plus, the American exceptionalism story, combined with Trump’s trade tariff plans, have generated a burst of dollar strength — for which read euro weakness. That is a boon to Europe’s exporters and should help dull the effect of additional tariffs. It has also pumped up Eurozone government bonds in anticipation of slower growth in the region. Lower bond yields act as a shock absorber by reducing borrowing costs and help to support demand for stocks. This may not be enough to shield the entire region from underperformance, but it does help.

The bigger point here is that the “US good, Europe bad” mantra is a blunt tool. Europe has not given up on its green energy transition — far from it. That props up demand for some of the big German gainers of the past month. And the need for Europe to up its game on defence spending, particularly since Trump’s re-election, is obvious. This opens up plenty of opportunities for investors who at least hope they know where to find them.

“This is the main thing that people need to remember: the European economy and European companies are not the same thing,” Helen Jewell, chief investment officer for BlackRock fundamental equities in Europe, told me this week. “US exceptionalism does not mean that Europe is awful. It does not mean people should be disregarding it . . . People are looking for excuses to invest in the US over Europe,” she added.

This is a common refrain among big asset managers, who often say clients often point at even minor episodes of political instability as a reason to give Europe a wide berth. An outbreak of political tranquility in Germany and France would be really helpful in terms of convincing local investors to keep funds in the region and in attracting overseas funds.

Mix in a faint glimmer of hope that Germany might break with tradition and spend its way out of trouble, and you already have the building blocks for a strong run in selected stocks that few are expecting.

Crédit Agricole lifts stake in Italy’s Banco BPM in blow to UniCredit bid

French lender’s stake-building comes in wake of €10.1bn takeover offer from Andrea Orcel’s bank

France’s Crédit Agricole has boosted its stake in Banco BPM in a move that will complicate UniCredit’s approach for the Italian lender. 

Crédit Agricole, which is already Banco BPM’s largest shareholder, said on Friday that it had entered into financial contracts that will lift its holding in the lender from 9.9 per cent to 15.1 per cent. It added that it would seek approval from Italian regulators to own up to 19.99 per cent of Banco BPM. 

The move by the French lender, which mirrors UniCredit’s use of derivatives to build a surprise stake in Germany’s Commerzbank earlier this year, comes after Banco BPM rejected its Italian rival’s €10.1bn takeover bid late last month.

The approach marked UniCredit chief executive Andrea Orcel’s latest attempt to forge a European banking champion. It also surprised Italian officials, coming just weeks after Banco BPM took a 5 per cent stake in rival Italian lender Monte dei Paschi di Siena.

Italian Prime Minister Giorgia Meloni’s government had hoped that Banco BPM could spur consolidation in the country’s banking sector, potentially merging with MPS and BPER Banca, to compete with UniCredit and Intesa Sanpaolo, the country’s largest lender.

Orcel and Crédit Agricole chief Philippe Brassac had been due to meet to discuss the Banco BPM takeover bid, according to one person with knowledge of the talks.

Banco BPM said last month, when it rejected UniCredit’s overture, that it remained “focused on the implementation of its 2023-2026 business plan and on its takeover of [asset manager] Anima”.  

However, under Italy’s so-called passivity rule, as the target of a takeover offer, Banco BPM cannot buy further stakes in MPS nor increase its takeover offer of more than €1bn for Anima for the next six months. The rule is aimed at barring target companies from making moves that can affect the outcome of a pending takeover bid. 

The Italian government has been looking at ways to help Banco BPM fend off UniCredit’s approach, according to people with knowledge of the deliberations. Italy’s finance minister Giancarlo Giorgetti told reporters last month that Rome could resort to its so-called golden powers, which are designed to block foreign takeovers of strategic national assets, to impose conditions on UniCredit’s attempt to take over Banco BPM.

Last week the government denied it had been considering passing an emergency decree to allow Banco BPM to overcome the passivity rule.

A growing market for credit risk transfers is drawing a debate over potential hazards and benefits

There is an old idea making new waves on Wall Street. Banks of all stripes are once again moving risk off their balance sheets, in line with the demands of their prudential regulators, to make room for taking on more risk.

These so-called “credit risk transfers,” or CRTs, enable banks to sell only the risks associated with various loans, or pools of loans — but not the loans themselves — to third-parties willing to assume those risks and take the associated rewards, or so they hope. They are also known as “significant risk transfer” or SRTs. “One of the major growing pains for this market is that no one can decide on a name. The product is known by different names in different places,” notes law firm A & O Shearman.

The intermediaries for such deals include the likes of Guy Carpenter, a division of the huge insurer Marsh McLennan, as well as some big Wall Street banks themselves. For a fee, they transfer some of the risk on banks’ balance sheets to the likes of Apollo Global Management, Blackstone, and Bayview Asset Management, among others, who like taking on the risk generated by others, hoping to profit from it.

Since 2017, the global market has grown by 20 to 25 per cent a year, reaching a record $24bn in 2023, according to data from credit investor Chorus Capital. It says there have been $16.6bn of deals this year up to September 30 involving 44 banks.

The idea is to free up regulatory capital placed against loans to allow for new loans to be made. Hopefully, it’s a virtuous cycle of reducing risk at depository institutions and housing it at other financial behemoths.

But just because risk is being removed from the balance sheets of the big Wall Street banks doesn’t mean that risk disappears from the system; it just means that it gets pushed around to others willing to assume it. The risk remains. The question always is whether the risk taken can be managed or contained, or whether it will soon explode in our faces.

And this is what worries people like Sheila Bair, the former chair of the Federal Deposit Insurance Corporation, and Simon Johnson, the newly-crowned Nobel laureate and MIT professor of entrepreneurship, who remember all too well how the promise of risk containment, using another creative financial product — “credit default swaps” — nearly blew the financial world to smithereens back in 2008.

Are CRTs another such ticking time bomb? Its proponents say no, of course, that CRTs could not be more different from credit default swaps. In an August interview with Bloomberg, Michael Shemi, the head of North America Structured Credit at Guy Carpenter, said that the collective experience of credit default swaps in 2008 “informed” the creation of the CRT market today — the aim is to not let the same thing happen again.

“Much of the polemic around this harks back to 2008 in the financial crisis,” he said. “And when people hear buzz words like ‘synthetic’ and ‘derivatives’ their stomachs start churning. But this is different in every possible way.” The difference, he said, is the CRTs hedge risk that arises out of normal course lending activities whereas credit default swaps allowed for uncapped leveraged speculation, whether you owned the underlying credit asset or not. “This is about true distribution of credit risk, rather than concentration of credit risk,” he said.

But Bair and Johnson, among others, worry that we could be witnessing the match being lit on the next powder keg. In an article in the FT last December, Bair wrote that “even if credit risk transfer is successful in protecting regulated banks, the risk is transferred to nonbank entities which appear less capable of managing and absorbing the losses.”

Johnson followed up in a September letter with his fellow co-chair of CFA Institute’s Systemic Risk Council Erkki Liikanen to Jay Powell, the chair of the Federal Reserve. He wanted the Fed to begin to “address the growing systemic vulnerabilities posed by” the use of CRTs. Johnson’s letter to Powell followed on the heels of one written by Senator Jack Reed of Rhode Island, who also urged Powell to “place additional guardrails” around credit risk transfers.

Some opponents of the use of CRTs also worry some of the buyers in these transactions are goosing their returns on these deals by using leverage, with money borrowed from the very same Wall Street banks that are transferring these risks to them. Senator Reed wonders “whether CRTs truly transfer credit risk to outside investors or further concentrate risk among a small number of Wall Street banks”. It’s a damn good question.  

As the U.S. Stock Market Booms, It’s Time to Look Abroad. 12 Picks From Our Experts.

Investing abroad has been a tough sell, but overseas markets offer growth—and value.

Investors effectively are paying nearly $240,000 for each of the company’s 402,100 Bitcoins, well above the market price.

Michael Saylor turned a wild idea into a $90 billion company. With Bitcoin now above $100,000, that idea could soon be tested.

Over the past four years, the chairman and controlling shareholder of MicroStrategy took a smallish business software company and turned it into the world’s largest corporate Bitcoin holder, with 2% of the Bitcoins outstanding—a stake now worth more than $40 billion.

The company’s market value is almost 2½ times that of the company’s Bitcoins, adjusted for $7 billion of debt and a software business that could be worth about $1 billion. The gap between MicroStrategy’s market value and the value of its Bitcoin holdings is at the heart of the debate about the company, which has sold stock and convertible bonds to fund its purchases.

Saylor calls MicroStrategy a “Bitcoin treasury company.” In a recent CNBC interview, he elaborated: “Our job is to bridge the traditional capital markets that want bonds, or equity, or options, and plug that into the crypto economy and use Bitcoin as a vehicle to do that.”

He has been very convincing. MicroStrategy has gained a huge retail following, which has contributed to the 500% gain this year in its stock to $395. Trading lately has been heavy in both the stock and options, with options volume at times rivaling that of Nvidia and Tesla.

The premium, however, looks too high, and the stock is vulnerable to a pullback, especially if the postelection run-up of 45% in Bitcoin to $101,000 begins to reverse. Investors effectively are paying nearly $240,000 for each of the company’s 402,100 Bitcoins, well above the market price.

Another risk is that MicroStrategy fails to keep pace with any further gains in Bitcoin if the premium contracts. Already, the stock has dropped 25% from its Nov. 21 peak of $543 as the premium leaks out of the stock even as Bitcoin hits record highs.

With institutional ownership of the stock low, aside from index funds and other, cheaper options like exchange-traded funds available for those who want access to the cryptocurrency, the success of the company’s strategy hinges on its ability to find buyers for its stock at a large premium to its Bitcoin holdings.

“Michael Saylor has used his evangelical qualities to get a cult following that will buy the stock at two to three times the value of its Bitcoin holdings,” says Julian Klymochko, the CEO of Accelerate, a Canadian investment firm. “True Bitcoin believers own the digital asset and self-custody it.”

MicroStrategy wasn’t always a crypto depository. The company had been selling business analytics software. But in 2020, Saylor started buying Bitcoin. Saylor’s view is that Bitcoin is the best commodity with capped issuance at 21 million and nearly all of that amount, about 20 million, now outstanding. That means only 5% more will be mined. Saylor believes that Bitcoin is going much higher. He sees 50% annual returns for the cryptocurrency.

The huge premium for the stock is a 2024 phenomenon. From 2022 through the end of 2023, MicroStrategy mostly traded at parity to the value of its Bitcoin and started this year at a premium of roughly 30%. Donald Trump’s presidential win energized Bitcoin, given his crypto-friendly views. Trump’s move to name Paul Atkins, who is also positive on crypto, as the new chair of the Securities and Exchange Commission helped push Bitcoin above $100,000 for the first time this past week.

MicroStrategy has flipped the script on the typical corporate policy on stock issuance: Don’t do it unless necessary to avoid diluting existing shareholders. The company has been on an equity issuance binge since the end of October, when it unveiled a plan to issue $21 billion of stock and $21 billion of bonds through 2027 and use the proceeds to purchase Bitcoin. MicroStrategy has sold about $10.5 billion of equity and issued a $3 billion convertible bond, putting it on pace to achieve that goal as early as next year.

MicroStrategy has raised its Bitcoin holdings by 60% since Sept. 30, which has lifted its average cost to $58,000 from $39,000, as it buys at higher levels. Investor Jim Chanos pointed out on X that the company bought only a small amount of Bitcoin in 2022 when the price was low—fewer than 9,000 Bitcoins—and a lot now with prices at record levels.

Saylor addressed this in a recent Barron’s interview: “Conventional wisdom is, when you announce a $21 billion equity raise, people are worried that the market will think you’re going to dilute them, but in fact, our plan is to accrete them.”

MicroStrategy has come up with a measure of the value accretion from this approach called Bitcoin “yield.” It isn’t a yield in the conventional sense but seeks to measure the change in the amount of Bitcoin per share held by the company. That “yield” has been over 60% as Bitcoin per 1,000 shares has gone to 1.5 from 0.9 this year.

The company also highlights as a positive the high volatility of its stock, with Saylor saying MicroStrategy is about 10 times as volatile as the S&P 500 index. That volatility has allowed the company to supplement its equity sales with issuance of convertible debt at attractive prices, since bond buyers like volatile stocks. The latest deal carried an interest rate of zero and a high conversion price of $672, a 55% premium to the market price at the time.

Adding debt, however, carries risk, which was the case in 2022 when Bitcoin traded below $20,000, and investors worried about MicroStrategy’s ability to repay its debt, which then traded below 50 cents on the dollar.

Saylor also talks about the value creation from buying Bitcoin using stock and bond sales, which he calls Treasury operations. Issuing lots of stock is the right approach if investors will buy your shares at a large premium to the value of your assets. The company offers its equity through what’s known as at-the-market sales directly to investors through a nine-member underwriting group. According to Bloomberg, MicroStrategy has analyst coverage from eight firms, all members of that group, and all eight have Buy ratings or the equivalent. So far, analysts have been right in their optimism.

Accelerate’s Klymochko thinks analysts and investors are going to extremes to justify the MicroStrategy valuation, calling it “mental jujitsu to justify buying the shares at such an inflated price and in such a convoluted way through a holding company that is basically a closed-end fund.” Closed-end funds raise money by issuing shares and using the proceeds to buy financial assets, and usually trade at a discount to their net asset value, not a premium.

Benchmark analyst Mark Palmer recently wrote in a client note that “detractors” have questioned whether the stock should trade at a premium to the value of its Bitcoin holding, “much less almost three times premium” that they then commanded. His response: Such a critique gives “short shrift” to the shareholder value that the company “is creating through its treasury operations, i.e., its repeated tapping of the capital markets to raise proceeds to fuel the addition of Bitcoin to its sizable holdings.” He has a Buy rating and a $650 price target on the stock and values the Treasury operations in his model at over $100 billion.

Adding to the risk is the presence of two leveraged exchange-traded funds on MicroStrategy with more than $4 billion in total assets. They are the Defiance Daily Target 2X Long MSTR (ticker: MSTX) and T-Rex 2X Long MSTR Daily Target (MSTU). If MicroStrategy stock drops and investors pull out of these ETFs, they would have to unwind their holdings.

It also seems unlikely that MicroStrategy will be added to the S&P 500, despite its large size, because it’s essentially a Bitcoin repository rather than a business with recurring earnings. The company could be added to the Nasdaq 100 index at the coming annual reconstitution that will be announced on Dec. 13.

Given these dangers, investors who are partial to Bitcoin should consider low-fee ETFs like the $50 billion iShares Bitcoin Trust, which has an annual fee of 0.25%.

MicroStrategy is a cult stock with a nearly $100 billion valuation supported by about $40 billion in assets. That may not end well for investors.

There is plenty of growth in the private credit market yet, especially for those branching out beyond direct lending

A private credit land grab is under way. Providers of non-bank loans are getting hoovered up by traditional asset managers and private equity houses keen to avoid missing out on this fast-growing segment. The willingness of sellers to sell out is a function of high valuations — but it also suggests that private credit’s golden moment may be drawing to a close. 

The latest example of this trend is BlackRock’s $12bn deal to buy HPS this week. It follows on from private equity firm Clearlake’s acquisition of MV Credit in September, Blue Owl’s $450mn acquisition of Atalaya in July and Brookfield’s $1.5bn investment to buy a majority stake in Castlelake earlier in the year. TPG bought Angelo Gordon last year, while Nuveen bought $1bn European private credit company Arcmont in 2022. 

In part, this is a reflection of private credit’s mouthwatering growth rates. Assets under management are forecast to reach $2.6tn by 2029, from $1.5tn in 2023 according to data provider Preqin. Traditional asset managers may also be motivated by fears that, rather than buying into fixed income mutual funds, investors will increasingly prefer a combination of low-cost ETFs and private credit exposure. Already, fixed income ETF flows are up 50 per cent compared with last year, according to Huw van Steenis at Oliver Wyman. By buying HPS, BlackRock can offer clients a range of credit products.

The rush to acquire private credit assets also suggests that, as giants have sprung up, it has become increasingly hard to expand one’s own business to scale. Private credit is, to a great extent, a scale game. Bigger operators see more deals and can build more selective and more diversified portfolios. The behemoths also find it easier to raise money, with Ares this year closing the largest fund ever at $34bn.

Sellers, for their part, will be attracted by the high valuations on offer given the scarcity of independents left on the shelf. BlackRock paid a handsome 30 times HPS’s earnings.

They may also have a wary eye on rising competition. Money has poured into the space to chase opportunities. The syndicated loan market has reopened after its post-pandemic lull, compressing spreads for direct lending. In the US, the share of direct loans paying 600 basis points or more over base rates has dropped from 83 per cent in the second half of 2023 to 22 per cent in the six months to the end of September, according to PitchBook LCD data.

There is plenty of growth in the private credit market yet, especially for those branching out beyond direct lending. But the close of a boom, at least in one of the strategies, is no bad time to be cashing in one’s chips.

Both firms confirm resolution but decline to disclose details stemming from departure of two former employees

Trading titans Jane Street and Millennium Management have settled a trade secrets lawsuit over allegations of a stolen trading strategy.

The parties said in a court filing on Thursday that the case had been dismissed. Millennium confirmed a settlement had been reached but declined to comment on the details. A Jane Street spokesperson said the case had been “resolved on mutually agreeable terms”.

The case, brought by Jane Street in April, was a rare instance of a public spat between two highly private firms whose use of cutting-edge trading technology has shaken up the old order on Wall Street. At one point in the case Jane Street asked that a hearing be closed to the public and the media, a request the judge dismissed as “borderline frivolous”. 

The spat also comes as theft of trade secrets suits risk becoming more common in finance as investors and traders increasingly rely on complex technology, algorithms and artificial intelligence to generate profits.

Jane Street alleged two ex-employees, who moved to Millenium earlier in the year, took a “highly valuable, unique and proprietary” trading strategy with them when they left.

The strategy centred on Indian options markets. Jane Street initially sought — but failed to win — a restraining order against Millennium’s use of the strategy. More recently, the court spat centred on how the trading firm could prove it had suffered irreparable harm.

Trading at Jane Street, known for its prowess in exchange traded funds and corporate bonds, netted more than $8bn of revenue In the first six months of 2024, the Financial Times has reported previously.

Millennium, founded by Izzy Englander in 1989, is one of the largest multi-manager hedge funds in the world, with more than $60bn in assets under management.

Both employees named in the suit, Douglas Schadewald and Daniel Spottiswood, are still employed as traders by Millennium, according to one source.