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In many cases, the investor and the investment manager are the same person or entity. Even pension funds sometimes have an in-house team these days. Almost all

In many cases, the investor and the investment manager are the same person or entity. Even pension funds sometimes have an in-house team these days. Almost all PEs and hedge funds have significant amounts of their own capital in their funds. Pension funds might view them as "investment managers", but they view themselves as "investors". Most non sophisticated investors have no clue what risk parity or efficient frontiers are. "Risk profile" and "exposure" are used in various contexts by different folks. Only people from a quant background would think something like this. That isn't a shot at quant, but it's a very specific lens through which to view or do investing. Fair or not, folks making investment decisions (ie the folks at PE, VC, hedge funds) have little respect for the people at pension funds, insurance, fund of funds etc. It might not be fair, but it's largely true. And it's largely true that one side wishes they were the other.

Galanwe 4y ago
Seriously, do you mind enlightening us of how you get that sense of the market? Because it is in total contradiction to what I see on the field... I started to reply to your comment but stopped as I can hardly agree with any single sentence you wrote.
- danielmarkbruce 4y ago
  PE and value hedge fund. Ie, basically the non-quant folks. I think there is a pretty large gap between quant and the rest of the investment community (although I haven't actually worked in quant, so I'm speculating this is where the mismatch is). Concrete example - Bill Ackman hasn't ever thought about "risk parity". The average small value fund hasn't ever thought of it. Activists dont'. PEs don't. VC's haven't even heard of it. PE and VC also think of their investors as "LPs", not investors. As for who wants to work where... this is anecdotal but have you ever heard of someone at a PE/VC/HF say "I would really like to work at CALPERS/CPP etc"? I have not

Galanwe 4y ago

Seriously, do you mind enlightening us of how you get that sense of the market? Because it is in total contradiction to what I see on the field... I started to reply to your comment but stopped as I can hardly agree with any single sentence you wrote.

danielmarkbruce 4y ago
PE and value hedge fund. Ie, basically the non-quant folks. I think there is a pretty large gap between quant and the rest of the investment community (although I haven't actually worked in quant, so I'm speculating this is where the mismatch is). Concrete example - Bill Ackman hasn't ever thought about "risk parity". The average small value fund hasn't ever thought of it. Activists dont'. PEs don't. VC's haven't even heard of it. PE and VC also think of their investors as "LPs", not investors. As for who wants to work where... this is anecdotal but have you ever heard of someone at a PE/VC/HF say "I would really like to work at CALPERS/CPP etc"? I have not