Hedge Fund Poetry

Not sure if anyone gets/likes these, but here's another one:

Luring pension plans
With a clever snare
Of high yield

Eroding counterparties' assets
Like acid rain on unsuspecting
Salted flesh

Before you yell "villain"
Remember the law of
Zero Sum.

The Hedgie

Ok, so here is the much delayed scoop on my new job. It’s not that I haven’t had the time (I worked a blissful 55 hours last week), it’s just that I’ve been too busy enjoying my newfound free time.
There has been much inquiry into what it is exactly that I do every day. That is – what is my routine? The honest answer is that there isn’t a typical day. This is a phrase one hears very often, and a lot of bankers will say that because it sounds much better than “depends on who decided to rape me today” but the fact is in banking you’re working in either Excel or Powerpoint/Word making models and pitchbooks. The type of model and underlying company stops mattering after you’ve done them all twenty times over till 3AM. The key difference between working at the quant hedgie and investment banking is that whereas in the latter I could painfully see myself becoming ever more robotic and melancholy here I’m becoming smarter and every day. At this rate my brain will soon be sharper than a coke addict’s razor blade.
At the hedge fund my only routine is morning P&L when I mark-to-market our positions (which can take 30 minutes or 3 hours depending on how many new trades I have to account for, and whether or not our broker messed up) and execute new trades as dictated by my Portfolio Managers and our black box model. The P&L models themselves are about as complex as anything you’ll see at a bank – VLOOKUPs and VBA macros galore.
After that I may spend the rest of the day on a project that one of the PMs asked me to do (I’m rarely told what to do here, since everyone is extremely polite). The projects vary across all aspects of running a fund: so far I’ve been asked to write an optimization function for one of our models, research a way to trade global term structure volatility and come up with various investment hypotheses. The best part is that I never feel like a grunt here – all of my work is genuinely interesting to do and receives immediate feedback.
When I don’t have a project however, which is about half the time, I am free to learn about whatever I want. It’s free time to get smart on sexy topics in quant finance and think of ways to turn them into profit for the fund. Getting paid [extremely well] to learn about the things I am so passionate about is a great feeling, I believe it’s called joy – but I’ve forgotten after working in IB for 4 months.
I’m done with my day whenever I feel like it’s time to go, which tends to fall between 6 and 7. Since we don’t trade intraday the whole atmosphere is extremely relaxed – hourlong lunches away from the desk and leaving early to go out on Friday is not only accepted but outright encouraged. In short, I haven’t been this happy with a job since I worked for a fashion house where part of my duties involved interviewing models and attending open-bar fashion shows.

Go Big or Go Home

The two weeks of my vacation have been amazingly relaxing (I was at any given point either sleeping or drinking). In a world of compromises, sometimes excess is mandatory to break the routine.
Having thus rested up I started my new job, which is even better than I imagined. More on that in my next post. Meanwhile, I have some Brazilian swaps to execute.

Bye Bye Banking!

If I haven't made any posts in a while it is because I have been drunk with joy. And alcohol. Last Friday the 29th I resigned from my role as Investment Banking Analyst to pursue my dream of controlling the world's financial markets (the key to success is having modest, easily-achievable, goals). Here's how the Arbitrageur got a new job (and put some substance behind his name):

About a month ago I applied for a Portfolio Analyst role through craigslist to work for a "new quantitative hedge fund platform, a strategic growth initiative funded and seeded by []. This is a small company centered around quantitative fixed income strategies with an entrepreneurial work environment that is well suited for focused, energetic, self-motivated and flexible top investment talent." Although the job required 2-3 years of buy-side experience, in my desperation to get out of my shoddy sinking dinghy of a bank I applied anyways, hoping that my mix of derivatives and programming knowledge and the intellectual tenacity of an Oxford educated pit bull would carry me through.

A couple days later I got an email from the president of the fund, asking me to come in for an interview. Thus began a quest that would consist of 7 hours worth of interviews, masked as so many doctor's appointments that my MDs must have thought I have become either terminally ill, a hypochondriac, or both. The questions asked of me by the president and his elite team of quant Ph.Ds (I'm the only person employed by the fund without one) ranged from derivative modeling to programming to econometrics and math. Quite frankly, I'm surprised that I made it out alive. My black belt in bullshit isn't exactly applicable to questions such as "write an SQL program that calculates the aggregate return and risk of a portfolio." I guess you never know how far you can stretch yourself until put into the "seat of heat", and that's exactly why I can't wait to start my new job. My mind will be honed to have the all the speed and litheness of a gymnast on a racehorse.

Before I begin climbing the steep and shaky ladder to the top, however, I am taking two weeks off to shed my banker skin and come to work ready to be reborn. Expect a recap when I return from my world tour of debauchery. Till then, I remain your arrogant Aribtrageur.