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London Stock Exchange lays $27bn bet that data are the future
July 28, 2019 | | Financial Times | by Arash Massoudi, Richard Henderson and Richard Blackden.

The London Stock Exchange Group more than 300 years old, is trying to get back on the front foot with a plan for its most ambitious acquisition, one that will shape the direction of the group for years to come. It is the most striking demonstration yet of the charge among exchange operators into the business of supplying the data that is at the heart of markets....The LSE on Friday confirmed a Financial Times report that it was in talks to buy data and trading venue group Refinitiv for $27bn including debt, from a consortium led by private equity group Blackstone. If an agreement is reached for a company best-known for its Eikon desktop terminals, it would transform the LSE into a provider of financial market infrastructure and data with the scale to take on US exchange industry heavyweights Intercontinental Exchange and CME Group as well as Michael Bloomberg’s financial information empire.

“This would be a bold move in the shift among exchanges away from the matching of buyers and sellers and into the business of selling information,” said Kevin McPartland, head of market structure research at consultancy Greenwich Associates. “Data are so valuable and so is having the network of traders and investors to access that data — that’s all at play here.”......The deal would also be a defining moment for the LSE’s chief executive, David Schwimmer, just a year after the relatively unknown former Goldman Sachs banker was parachuted in to steady the ship. Its scale will bring considerable risk in execution alongside the need to convince LSE shareholders that taking on Refinitiv’s $12bn of debt will prove worth it.

Industry analysts see the strategic logic of the deal for the LSE, best known for its UK stock exchange and derivatives clearing house LCH. While revenue from initial public offerings can be more volatile, spending by everyone from asset managers to hedge funds on financial data and the analytical tools to make use of it has been going in one direction. It hit a record $30.5bn last year
.......“What’s happened is exchanges have found it more difficult to find ways of generating revenue in their traditional businesses,” “You can deliver data so easily now, there is voracious appetite from anyone making investment decisions so they can get an edge.”.....As well as winning over LSE shareholders, any deal is likely to face a lengthy period of antitrust approvals.

“There is a wider market concern about exchanges and data vendors combining,” said Niki Beattie, founder of Market Structure Partners. “The global world of data distribution is presided over by a small number of players who have a lot of power.”
asset_management  Blackstone  Bloomberg  bourses  data  financial_data  hedge_funds  inflection_points  IntercontinentalExchange  investors  LSE  mergers_&_acquisitions  M&A  Refinitiv  stockmarkets  Thomson_Reuters  tools  trading_platforms  turning_points  defining_moments 
18 days ago by jerryking
White men run 98% of finance. Can philanthropy bring change?
June 16, 2019 | Financial Times | by Rob Manilla.

Q: How do you achieve change at the decision making level in the finance industry when diversity moves at glacial pace?
asset_management  diversity  endowments  hedge_funds  finance  foundations  Kresge  meritocratic  philanthropy  private_equity  real_estate  results-driven  social_enginering  structural_change  under-representation  white_men  women 
8 weeks ago by jerryking
Spy tactics can spot consumer trends
MARCH 22, 2016 | Financial Times | John Reed.
Israel’s military spies are skilled at sifting through large amounts of information — emails, phone calls, location data — to find the proverbial needle in a haystack: a suspicious event or anomalous pattern that could be the warning of a security threat.....So it is no surprise that many companies ask Israeli start-ups for help in data analysis. The start-ups, often founded by former military intelligence officers, are using the methods of crunching data deployed in spycraft to help commercial clients. These might range from businesses tracking customer behaviour to financial institutions trying to root out online fraud......Mamram is the Israel Defense Forces’ elite computing unit.
analytics  consumer_behavior  cyber_security  data  e-mail  haystacks  hedge_funds  IDF  insights  intelligence_analysts  Israel  Israeli  Mamram  maritime  massive_data_sets  security_&_intelligence  shipping  spycraft  start_ups  tracking  traffic_analysis  trends 
april 2019 by jerryking
A Man for All Markets by Edward O. Thorp
by Edward Thorp, a mathematician who applied his skills, from Las Vegas to Wall Street, from the blackjack tables to the world of hedge funds.
books  hedge_funds  Las_Vegas  mathematics  quantitative  Wall_Street 
march 2019 by jerryking
DE Shaw: inside Manhattan’s ‘Silicon Valley’ hedge fund
March 25, 2019 | Financial Times Robin Wigglesworth in New York.

for a wider investment industry desperately trying to reinvent itself for the 21st century, DE Shaw has evolved dramatically from the algorithmic, computer-driven “quantitative” trading it helped pioneer in the 1980s.

It is now a leader in combining quantitative investing with traditional “fundamental” strategies driven by humans, such as stockpicking. This symbiosis has been dubbed “quantamental” by asset managers now attempting to do the same. Many in the industry believe this is the future, and are rushing to hire computer scientists to help realise the benefits of big data and artificial intelligence in their strategies........DE Shaw runs some quant strategies so complex or quick that they are in practice almost beyond human understanding — something that many quantitative analysts are reluctant to concede.

The goal is to find patterns on the fuzzy edge of observability in financial markets, so faint that they haven’t already been exploited by other quants. They then hoard as many of these signals as possible and systematically mine them until they run dry — and repeat the process. These can range from tiny, fleeting arbitrage opportunities between closely-linked stocks that only machines can detect, to using new alternative data sets such as satellite imagery and mobile phone data to get a better understanding of a company’s results...... DE Shaw is also ramping up its investment in the bleeding edge of computer science, setting up a machine learning research group led by Pedro Domingos, a professor of computer science and engineering and author of The Master Algorithm, and investing in a quantum computing start-up.

It is early days, but Cedo Crnkovic, a managing director at DE Shaw, says a fully-functioning quantum computer could potentially prove revolutionary. “Computing power drives everything, and sets a limit to what we can do, so exponentially more computing power would be transformative,” he says.
algorithms  alternative_data  artificial_intelligence  books  D.E._Shaw  financial_markets  hedge_funds  investment_management  Manhattan  New_York_City  quantitative  quantum_computing  systematic_approaches 
march 2019 by jerryking
The Oracle of Boston - Seth Klarman
Jul 7th 2012 | Boston

A scanned version of “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor” has been circulating around trading floors. One hedgie likens Mr Klarman's book to the movie “Casablanca”: it has become a classic......Mr Klarman still runs Baupost like a family office. He is extremely risk averse; his primary goal is not stellar returns but preservation of capital.......He has deliberately maintained a sticky investor base composed almost entirely of endowments, foundations and families, which understand his investment philosophy and will not redeem after a few negative quarters.
Boston  hedge_funds  investors  investing  margin_of_safety  Seth_Klarman  value_investing/investors  books  Baupost  family_office 
january 2019 by jerryking
How do hedge funds learn new industries quickly? - Quora
Quickly' is very subjective and remember funds(hedge,mutual,pension,etc) do not need to know everything about a industry only to understand the drivers of what moves the stock. That is a massive difference between how a student approaches learning and a analyst, analysts aren't trying to know everything only what can make them money.

Exceptional People
They are used to covering certain sectors some may come from the sell side and covered maybe 15-30 stocks or the buy side and covered 40-60 stocks. Regardless of where they came from they are used to tracking and getting alot of information very efficiently. They are also willing to put in long hours and read/study anything that is needed. After a while(if they don't burn out) they become masters are managing huge information bandwidth.

Tools/Data
For accounting and raw data there are plenty of tools. Bloomberg is quite widely used and with a few commands/clicks you can have a excel sheet with all the data you can want about a companies financials.

Sell side
If you have a large enough fund and relationships on the sell side then they'll do all they can to get you up to speed very quickly. The sell side will have a team of analysts covering a industry/sector your intrested in and if your a good client then they'll spend time and teach you want you want to know.

Reduce noise/Very focused:
Great analysts are masters are reducing the amount of noise that comes there way. They filter emails and calls like crazy so there are less distractions. If your ideas don't make them money they will ignore you(regardless of how smart you are). If they are really good they won't even open your emails if you have not proven you add value to them.
hedge_funds  ideas  learning_curves  new_industries  noise  signals  Quora 
november 2018 by jerryking
How vulture capitalists ate Sears
If you track the long-term course of Sears' revenue and stock price, the problems didn't just set in with the arrival of Walmart and the big-box stores, or with Amazon and the rise of the internet economy. Instead, the tailspin really started with the arrival of a guy named Eddie Lampert and his hedge fund, ESL Investments.

Lampert had already bought Kmart out of bankruptcy in 2003. And in 2004 and 2005, he engineered Kmart's purchase of and merger with Sears, creating the third-largest retailer in the country at the time. Lampert became chairman of the combined company's board. In 2013, Lampert became Sears' CEO.

Lampert slashed capital investments to try and create a more efficient company. He retooled Sears' structure, so that almost three dozen different business departments — like shoes, home furnishings, or menswear — were each siloed, with their own management team and even their own board. It was a model taken from the hedge fund world, meant to encourage healthy competition inside the company and thus power a better overall business.
investor_capitalism  hedge_funds  sears  retail 
october 2018 by perich
Offering Inspiration and Advice, Real Vision Is HGTV for Hedge Fund Hopefuls - The New York Times
By Landon Thomas Jr.
Oct. 2, 2018

Real Vision offers a way to skip the traditional hedge fund path: slog away at an investment bank or a mutual fund, then settle down in Midtown Manhattan or Greenwich, Conn. For a modest fee, Real Vision will connect investors to a network of elite Wall Street analysts, traders and hedge fund managers, making it easier for novices like Mr. O’Dea to jump the line.

Raoul Pal, a former hedge fund executive who also worked at Goldman Sachs and runs an investment strategy service called Global Macro Investor, co-founded Real Vision. Since then, 20,000 people have signed up, paying $180 a year to hear directly from financial insiders.

It is a vibrant community with an average age of 38, which distinguishes it from CNBC and its more mature audience. Mixing the Netflix payment model with a cozy interview style, Real Vision offers to help upstart investors decode the mysteries of today’s markets. It features those insiders presenting their views in lengthy, explanatory videos: How to short China, the long-term opportunities in emerging markets and the best way to play Bitcoin, among others.
hedge_funds  television  inspiration  subscriptions  investors  explanatory 
october 2018 by jerryking
Paul Singer, Doomsday Investor
August 27, 2018 | The New Yorker | By Sheelah Kolhatkar.

Paul Singer, ,
The head of hedge fund Elliott Management, has developed a uniquely adversarial, and immensely profitable, way of doing business.

Bush had co-founded Athenahealth, a platform that digitizes patient medical records and billing claims for hospitals and health-care providers, in 1999, and he had built it into an enterprise with more than a billion dollars in revenue. One of the firm’s marketing taglines was that it freed doctors and nurses to spend more time doing what they loved—practicing medicine—and less time on paperwork. Athena served more than a hundred thousand health-care providers...... Paul Singer, the founder of Elliott Management and one of the most powerful, and most unyielding, investors in the world. Singer, who is seventy-three, with a trim white beard and oval spectacles, is deeply involved in everything Elliott does. The firm has many kinds of investments, but Singer is best known as an “activist” investor, using his fund’s resources—about thirty-five billion dollars—to buy stock in companies in which it detects weaknesses. Elliott then pressures the company to make changes to its business, with the goal of improving the stock price.....Hedge funds, especially activist hedge funds, are established users of private-investigation services.....The investor acknowledged that Bush was far from perfect, and said that “there is a role for activists to hold managements accountable.” But the investor worried that the focus on the bottom line would undermine the innovative spirit that had made Athena successful. “.....The idea that companies exist solely to serve the interests of shareholders—rather than also to serve workers, customers, and the larger community—has been dominant in the business world in the past thirty years. As the field of activist investing becomes increasingly crowded, many investors are going beyond their original mission of finding ailing or mismanaged companies and pushing them to improve. Instead, some have been targeting larger, financially prosperous companies, such as Procter & Gamble, Apple, and PepsiCo. ......Often, activists advocate for measures that drive up the stock price but can have negative effects in the future, such as the outsourcing of jobs, the elimination of research and development, and the borrowing of money to buy back a company’s own stock. The wisdom of these tactics has come under increasing scrutiny. Some of the most successful businesses to emerge in recent decades have staved off short-term pressures, forcing their investors to be patient with uncertainty and experimentation. The founder of Amazon, Jeff Bezos, wrote in an early investor letter that building something new “requires you to experiment patiently, accept failures, plant seeds, protect saplings.” ........Over time, this lack of long-term vision alters the economy—with profound political implications. Businesses are the engine of a country’s employment and wealth creation; when they cater only to stockholders, expenditures on employees’ behalf, whether for raises, job training, or new facilities, come to be seen as a poor use of funds. Eventually, this can result in fewer secure jobs, widening inequality, and political polarization. ..........Bush spoke about his last day in the office, when he had sobbed during his final address to Athena’s employees. He had also written a farewell letter. “I believe that working for something larger than yourself is the greatest thing a human can do. A family, a cause, a company, a country—these things give shape and purpose to an otherwise mechanical and brief human existence,” the letter read. “The downside about things that are larger than ourselves, of course, is that we who have the privilege of serving them ourselves are fungible. It is the fundamental definition. You can’t have the grace of the one without the other......Throughout our conversations, Bush returned to a theme that consumed him. He talked about how investors like Singer—financiers who take the assets built by others and manipulate them like puzzle pieces to make money for themselves—are affecting the country on a grand scale. A healthy country, he said, needs economic biodiversity, with companies of different sizes chasing innovation, or embarking on long, hard projects, without being punished. The disproportionate power of the Wall Street investor class, Bush felt, dampened all that, and gradually made the economy, and most of the people in it, more fragile.
shareholder_activism  Wall_Street  Sheelah_Kolhatkar  profile  investors  financiers  vulture_investing  hedge_funds  distressed_debt 
august 2018 by jerryking
Hedge funds fight back against tech in the war for talent
August 3, 2018 | | Financial Times | by Lindsay Fortado in London.

Like other industries competing for the top computer science talent, hedge funds are projecting an image that appeals to a new generation. The development is forcing a traditionally secretive industry into an unusual position: having to promote itself, and become cool.

The office revamp is all part of that plan, as hedge funds vie with technology companies for recruits who have expertise in machine learning, artificial intelligence and big data analytics, many of whom are garnering salaries of $150,000 or more straight out of university.

“A lot have gone down the Google route to offer more perks,” said Mr Roussanov, who works for the recruitment firm Selby Jennings in New York. “They’re trying to rebrand themselves as tech firms.”...While quantitative investing funds, which trade using computer algorithms, have been on the forefront of hiring these types of candidates, other hedge funds that rely on humans to make trading decisions are increasingly upping their quantitative capabilities in order to analyze reams of data faster.

The casual work atmosphere and flexible hours at tech firms such as Google have long been a strong draw, and hedge funds are making an effort to 'rebrand themselves' Besides the increasing amount of perks funds are trying to offer, like revamping their workplace and offering services such as free dry-cleaning, they are emphasizing the amount of money they are willing to spend on technology and the complexity of the problems in financial markets to entice recruits.

“The pitch is . . . this is a very data-rich environment, and it’s a phenomenally well-resourced environment,” said Matthew Granade, the chief market intelligence officer at Point72, Steve Cohen’s $13bn hedge fund.

For the people Mr Granade calls “data learning, quant types”, the harder the problem, the better. “The benefit for us is that the markets are one of the hardest problems in the world. You think you’ve found a solution and then everyone else catches up. The markets are always adapting. So you are constantly being presented with new challenges, and the problem is constantly getting harder.”
hedge_funds  recruiting  uWaterloo  war_for_talent  millennials  finance  perks  quantitative  hard_questions  new_graduates  data_scientists 
august 2018 by jerryking
The quant factories producing the fund managers of tomorrow
Jennifer Thompson in London JUNE 2, 2018

The wealth of nations and individuals is ever more likely to be influenced by computer algorithms as investors look to computer-powered quantitative trading strategies to generate returns. But underpinning those machines and algorithms are real people, namely the world’s sharpest mathematicians and data scientists.

Though not hard to identify, virtually every industry — and especially Big Tech — is competing with the financial world for their skills....Competition for talent means the campuses of elite universities have become a favoured hunting ground for many groups, and that the very best students and early career academics can command staggering starting salaries should they join the investment world......The links asset managers foster with universities vary. In the UK, Oxford and Cambridge are home to dedicated institutes established and funded by investment managers. Although these were set up with a genuine desire to foster research in the field, with a nod to philanthropy, they are also proving to be an effective way to spotting future talent.

Connections between hedge funds and investment managers are less formalised on US campuses but are treated with no less importance.

Personal relationships are important,
mathematics  data_scientists  quants  quantitative  hedge_funds  algorithms  war_for_talent  asset_management  PhDs  WorldQuant  Big_Tech 
june 2018 by jerryking
Harvard’s Endowment Is Profiting From Puerto Rico’s Debt as the Island’s Schools Face Crippling Cuts
The situation highlights the role college endowments play in propping up hedge funds, whose moneymaking strategies have often been criticized as anti-worker and predatory. According to Business Insider, one-third of all hedge fund assets under management come from endowments and public pension funds. Endowments had been limiting their exposure to hedge funds, due to disappointing returns and high fees, but that trend has slowed. Harvard’s endowment recently paused some of its investments in the fossil fuels industry, but would not commit to a full divestment.
seth_klarman  puerto_rico  corruption  hedge_funds  harvard_business_school 
february 2018 by perich

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