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Winton is fundamentally dissimilar to AHL. Winton have a reputation for skill and outperformance. AHL have a reputation for blundering incompetence (that is why

Winton is fundamentally dissimilar to AHL. Winton have a reputation for skill and outperformance. AHL have a reputation for blundering incompetence (that is why the 'H' in AHL left to start Winton, and became a billionaire doing so). The only goal is to make money. I understand your point in that AHL are dissimilar to RenTech but I didn't say any way was correct. The right way is whatever makes money. You have firms that look like AHL and do better. I would look at who they actually hire. From what I know, there is almost no-one in their quant team who didn't go into Oxbridge (at least for PG). That is not a low bar. Btw, I have seen this elsewhere. I know of non-quant firms that only hire from Oxbridge, and they get the same result as firms that don't have a specific analyst program (i.e. everyone rotates through admin/sales/marketing). The point isn't that this doesn't work. RenTech have a high bar, it works. The point is that you have to really understand why you are doing it. Hiring "smart" people without thought only results in a higher wage bill. And if we are going to get into it: one big issue with AHL has been the management (that is why David Harding left). They have got better but I don't think they are totally out the woods (I have heard they are trying to do momo in illiquid and esoteric markets...which won't work). Saying it is the clients is one of the worst excuses in investment management. That is actually true one time in a hundred (BlueCrest is one). It is like the crap football teams complaining about good teams having all the money. Good fund managers have good clients because they don't fuck up all the time. The issue is AHL, for whatever reason, kept trying to do the same thing for decades, and expected to print money.

tomp 7y ago
Thanks, interesting and insightful comment. Regarding analyst/graduate rotations, what do you think is the actual value there? To me it seems just a way for the team to lose a potentially decent employee just as they’re done training him/her. If the idea is to familiarize juniors with the firm, what it does and how it works, wouldn’t a shorter program with direct lessons work better (e.g. what some investment banks do - send everyone to the HQ for a few weeks - or Jane Street, where everyone first learns OCaml)?
- hogFeast 7y ago
  The value is that they hire a ton of people with a very low bar. The smartest go into investment research, the next lot go into sales, the next into marketing, the rest into admin. The effect, I believe, is two-fold: one, these guys are cheap. And two, you don't have to rely on someone's education, you can see if they actually can function in the workplace. But this places a huge burden on actually being able to train people who aren't particularly intelligent to do a complex job and creating a team-based culture (i.e. where the sum is greater than the parts). One example of this is Aberdeen Asset Management. They went from one guy in an office to one of the largest asset managers in the UK (and the world) by hiring this way. A big part of their growth came from acquiring firms with lots of lazy Oxbridge types, firing them all, and moving in their low-cost team of guys. This isn't like what IBs do, it isn't what Jane Street. Both are highly selective, and hire into specific jobs. IBs will do a big training program over a few weeks to get everyone up to speed (i.e. on accounting, whatever) but what I am talking about is 3-month rotations through every part of the business. HR at IBs hire "geniuses", they hire the best of the best...if you do this, it makes no sense to pay them a big salary and then stick them in the back office (they will probably get poached). Now most of these people aren't actually any good, most will get promoted up to VP because they have been there X years, and then get laid off during a recession...but the hiring culture is totally different (and btw, massively overstates the ability of HR too). And btw, it is semi-efficient because most IBs understand they will end up with a bunch of overpaid turnips...it is worth it to find the next rainmaker (but the rainmaker in asset management never pays off because they get poached).
  - tomp 7y ago
    Interesting.. yeah you're right, AFAIK better banks (Goldman, BAML) hire for specific roles even for non-IB teams... All in all, I often wonder if/how it's possible to improve on both of these approaches, how to figure out both if someone is actually intelligent (as opposed to just booksmart, or got the interview questions from the recruiter) and whatever else is needed to perform (drive, common sense, not IYI, ... I'm probably not experienced enough even to know, let alone to judge...), particularly for computer developers or generally researcher types. Btw, I'd love to meet and chat about this. If you're in London, feel free to email me tom.primozic at gmail

tomp 7y ago

Thanks, interesting and insightful comment. Regarding analyst/graduate rotations, what do you think is the actual value there? To me it seems just a way for the team to lose a potentially decent employee just as they’re done training him/her. If the idea is to familiarize juniors with the firm, what it does and how it works, wouldn’t a shorter program with direct lessons work better (e.g. what some investment banks do - send everyone to the HQ for a few weeks - or Jane Street, where everyone first learns OCaml)?

hogFeast 7y ago
The value is that they hire a ton of people with a very low bar. The smartest go into investment research, the next lot go into sales, the next into marketing, the rest into admin. The effect, I believe, is two-fold: one, these guys are cheap. And two, you don't have to rely on someone's education, you can see if they actually can function in the workplace. But this places a huge burden on actually being able to train people who aren't particularly intelligent to do a complex job and creating a team-based culture (i.e. where the sum is greater than the parts). One example of this is Aberdeen Asset Management. They went from one guy in an office to one of the largest asset managers in the UK (and the world) by hiring this way. A big part of their growth came from acquiring firms with lots of lazy Oxbridge types, firing them all, and moving in their low-cost team of guys. This isn't like what IBs do, it isn't what Jane Street. Both are highly selective, and hire into specific jobs. IBs will do a big training program over a few weeks to get everyone up to speed (i.e. on accounting, whatever) but what I am talking about is 3-month rotations through every part of the business. HR at IBs hire "geniuses", they hire the best of the best...if you do this, it makes no sense to pay them a big salary and then stick them in the back office (they will probably get poached). Now most of these people aren't actually any good, most will get promoted up to VP because they have been there X years, and then get laid off during a recession...but the hiring culture is totally different (and btw, massively overstates the ability of HR too). And btw, it is semi-efficient because most IBs understand they will end up with a bunch of overpaid turnips...it is worth it to find the next rainmaker (but the rainmaker in asset management never pays off because they get poached).
- tomp 7y ago
  Interesting.. yeah you're right, AFAIK better banks (Goldman, BAML) hire for specific roles even for non-IB teams... All in all, I often wonder if/how it's possible to improve on both of these approaches, how to figure out both if someone is actually intelligent (as opposed to just booksmart, or got the interview questions from the recruiter) and whatever else is needed to perform (drive, common sense, not IYI, ... I'm probably not experienced enough even to know, let alone to judge...), particularly for computer developers or generally researcher types. Btw, I'd love to meet and chat about this. If you're in London, feel free to email me tom.primozic at gmail