Repo Trading - Why would one stay away?

I think the reason people say that is: 1) Repo's are a pretty niche product without much mobility (except to other funding functions like Corporate Treasury, asset liability management, etc) 2) Funding desks are not oriented toward trading PnL but to locate cheap and secure funding strategies for firm inventory (FYI - this is not always true, some funding desks have dual mandates to both fund firm inventory and make markets in repo, hopefully profitably)

Right, but the funding/treasury area more generally is still one of the few places you can take prop risk these days (at least at certain banks).

This topic has been cover'd before.

The main reason is most repo guys are still stuck around from the 80s, when repo was cool and never let go of their posts. It is hard to find new blood in repo. There is lots of average/good repo traders very few great ones. You can make steady P&L in repo and continue a long due to lack of VAR. But on a exotics desk or commodities at times due to var/balance sheet you gotta go for the home runs. Repo guys do not do that.

Anyways the great repo traders, become global macro hedge fund dudes of the world. I have explained before how repo desks become exciting in Lehman days or whenever LBOs/M&A kicks up. Or the in the case of Iksil the man, when you banks commercial lending gets so large you have a SHIT ton of balance sheet to play with. Aka JPM's assets have grown a ton in the last 3 years per bloomberg article.