How the Hottest Hedge Funds on Wall Street Really Manage Risk
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 25 July 2024
⏱️ 53 minutes
🧾️ Download transcript
Summary
Multi-strategy hedge funds, also known as "pod shops," have become the hottest ticket on Wall Street. The business model is supposed to allow hedge funds to operate more efficiently. That includes deploying capital in a more productive manner and better managing risk. But how does risk management at some of the most sophisticated funds on Wall Street actually work? In this episode, we speak with Rich Falk-Wallace, formerly of Citadel and now the founder and CEO of Arcana, which provides risk management and portfolio software for multi-strat funds. We talk about how risk models are impacting investor behavior and wider markets, how multi-strat traders come up with their ideas, and the factors that go into sizing and evaluating their positions.
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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 Alternatives from P-GM. In And our new podcast, Risky Business, is a show about making better decisions. |
| 0:34.3 | We're both journalists whom we light as poker players, and that's the lens we're going to |
| 0:38.0 | use to approach this entire show. |
| 0:40.4 | We're going to be discussing everything from high-stakes poker to personal questions. |
| 0:44.0 | Like whether I should call a plumber or fix my shower myself. |
| 0:48.0 | And of course we'll be talking about the election too. |
| 0:50.0 | Listen to risky business wherever you get your podcasts. |
| 0:54.0 | Bloomberg Audio Studios. |
| 1:00.0 | Podcasts, Radio News. Hello and I'm Tracy Allaway. Tracy I still want to learn more about how. |
| 1:15.0 | Hello and welcome to another episode of the Odd Lots Podcast. |
| 1:19.0 | I'm Joe Wiesenthal. |
| 1:21.0 | And I'm Tracy Allaway. |
| 1:22.0 | Tracy, I still want to learn more about how multi strategy hedge funds work. |
| 1:27.0 | I thought you're going to say I still don't know anything about multi strategy. |
| 1:30.0 | Well, that too. |
| 1:31.0 | Well, that too. Well, that too. |
... |
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