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Alternative Market Briefing

What is the caliber of investment talent entering hedge funds?

Thursday, April 26, 2018

Komfie Manalo, Opalesque Asia:

Everybody in the hedge fund industry is talented, but we have to distinguish between me-too talent and differentiated talent, said Rick Doucette, CEO and CIO of Antecapio Investment Partners. He added that there has always been a lot of me-too talent in this industry, but it has been very hard to find differentiated talent.

"And when I say I see more talent availability, it's that I see more differentiated talent available than I have seen in the past," he told participants at the latest Opalesque Connecticut Roundtable.

At the same time, Doucette expounded about what he called "marginal talent". He explained that if you go back into the 80s and 90s, the talent was different because the focus was on being hedged. It was only in 2000 when Reg FD happened that the value of research on the street diminished and the industry was forced to push more of the research in-house.

How hedge funds ended up getting their beta connotation

"With research now pushed in-house, firms started hiring people in that were more comfortable taking directional bets in the marketplace," he went on to say. "So the industry shifted away from real true alpha generation into sort of a hybrid. The hybrid was hedged with a directional bias, which introduced more of a beta connotation."

It is not that all those hedge fund managers were not talented, as Doucette......................

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