This week, we speak Ilana Weinstein, founder and CEO of The IDW Group, a leading consulting & hiring boutique for hedge funds, private equity and family offices in search of top investment talent. Her career took her from University of Pennsylvania to Goldman Sachs to Harvard Business School to the Boston Consulting Group.
She works with firms such as Citadel, Millenium, Point 72, and other highly-rated, sophisticated shops.
We discuss how difficult the present environment is for the hedge fund world. When she launched IDW in 2003, there were 3,000 hedge funds managing $500 billion; today, there are 11,000 hedge funds managing $3.5 trillion. She explains why “Scale” is so important in the hedge fund world — data science and quant are a path to alpha, and very few firms can afford that sort of access to talent.
We discuss why it is a myth that the quickest way to achieve wealth is to launch a hedge fund. Most of the 11,000 hedge funds are single manager funds — neither Multi-Strat nor Multi manager — she notes two thirds of funds have an average AUM of $250 million. She suggests that the shakeout in hedge funds is continuing: “Its like a cottage industry of two bit players;” most of these guys will either muddle along or not exist in a few years.
She notes that there is a “war for talent” and that those people who can consistently generate alpha are sought after.
Her favorite books can be seen here; A transcript of our conversation is available here.
You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google, Bloomberg, and 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.
Ilana Weinstein’s Favorite Books
I Am Charlotte Simmons by Tom Wolfe
The Big Short: Inside the Doomsday Machine by Michael Lewis
Hacking Darwin: Genetic Engineering and the Future of Humanity by Jamie Metzl
Books Barry Mentioned
The Spider Network: How a Math Genius and a Gang of Scheming Bankers Pulled Off One of the Greatest Scams in History by David Enrich
The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution by Gregory Zuckerman
The Bonfire of the Vanities by Tom Wolfe