The Hedge-Fund War for Talent (Bloomberg) These are difficult times for hedge funds: Market-beating returns are elusive and underperformance is the norm. Those people who can consistently generate alpha, or market-beating returns, are highly sought after. Thus, the “war for talent,” says this week’s guest on Masters in Business, Ilana Weinstein, founder and chief executive officer of executive placement firm IDW Group, which has worked with hedge funds such as Citadel, Millenium and Point 72. Weinstein started IDW in 2003, when there were 3,000 hedge funds managing about $500 billion; today, there are more than 11,000 hedge funds managing $3.5 trillion. However, about two-thirds of these funds have assets of $250 million or less.
It is behind paywall so here is the rest of that article, which is actually summary of a podcast: “ Weinstein says it is an enduring myth that “the quickest way to achieve wealth is to launch a hedge fund.” She suggests that the shakeout in the industry will continue: “It's like a cottage industry of two-bit players,” most of whom will either just get by or fold in a few years. In our conversation, she explains why scale is so important in the hedge fund world. Furthermore, data sciences and quantitative analysis are the path to alpha, and few firms can find or afford the talent. Her favorite books can be seen here; a transcript of our conversation is here. You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google, Bloombergand Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here. Next week, we speak with Joe Ricketts, founder of TD Ameritrade, whose family trust owns the Chicago Cubs. He is the author of "The Harder You Work, the Luckier You Get: An Entrepreneur’s Memoir.” “