How Hedge Funds Discover the Next Superstar Trader
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 5 September 2024
⏱️ 58 minutes
🧾️ Download transcript
Summary
One of the problems in investing or trading is that — to use a common disclaimer — past results are no guarantee of future success. Someone can have a great track record in their stock picks, but maybe they just got lucky. Or maybe they were particularly well-dialed into one market regime that inevitably shifts. Or maybe they're actually just better than other traders. For multi-strategy hedge funds or "pod shops," there's an ongoing battle to hire or train the next great portfolio manager. But how can managers tell who is actually good and who isn't? On this episode of the podcast, we speak with Joe Peta, who was previously the head of performance analytics at Point72 Asset Management and has had a long career in the trading world. He's also an avid fan of sports gambling, and the author of the recent book, Moneyball for the Money Set, which attempts to take some of the talent analytical principles that originated in Major League Baseball and apply them to evaluating portfolio managers. He talks us through the traditional approach funds use to find or create superstars, and how these approaches can be improved upon using more rigorous, quantitative methods.
Mentioned in this episode:
Hedge Fund Talent Schools Are Looking for the Perfect Trader
How to Succeed at Multi-Strategy Hedge Funds
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Transcript
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| 0:00.0 | Direct lending has been one of the most dynamic areas of the private alternative space these last few years, |
| 0:05.8 | having grown massively as a source of capital for both corporate borrowers, |
| 0:09.9 | but also financial sponsors that have kept going from strength to |
| 0:12.8 | strength and have needed that private capital to |
| 0:15.3 | foster the growth that they've been experiencing. |
| 0:18.1 | For leading alternative investing insights, |
| 0:21.2 | listen to Speaking of Altern from P-gyim. |
| 0:27.0 | Behind the bright lights and adrenaline of pro sports is an equally exciting world of negotiations and deal-making. |
| 0:34.0 | That's what we cover each week on our podcast, The Deal. |
| 0:37.0 | I'm Alex Rodriguez, former baseball player turned business executive. |
| 0:41.0 | And I'm Jason Kelly, chief correspondent at Bloomberg Originals. Every |
| 0:44.2 | Thursday we talk to all stars like Serena Williams and Derek Jeter, as well as the brains |
| 0:48.6 | behind brands like the Harlem Globetrotters and Nasdaq. Listen to the deal wherever you get your podcasts. Audio Studios. Podcasts, radio news. Hello and I'm Tracy Allaway. |
| 1:13.0 | Tracy. |
| 1:15.0 | Hello and welcome to another episode of the Odd Lots Podcast. |
| 1:20.0 | I'm Joe Wiesenthal. |
| 1:22.0 | And I'm Tracy allaway. |
| 1:23.0 | Tracy Do you know that sometimes I wonder like you know one in the morning if I can't sleep I think to myself in a different life could I have been the next Steve Cohen. |
| 1:33.0 | No, for real though, I don't, you know, need to talk about it. |
| 1:38.0 | There's a lot and I've brought it up before. |
| 1:40.0 | You know, I did get an offer at a prop trading shop right after college to be a stock trader at this place where they're going to let you |
| 1:46.7 | to your capital. And I think Steve Cohen started off like as a prop trader at some shop before being one of the great hedge funders of all time. |
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