Investor interest in hedge funds continues to grow.

Institutional investors poured nearly twenty five billion dollars into the sector in the second quarter this year, the most since twenty fourteen.

That's according to the latest hedge fund research report.

It's getting tougher recruiting the rate talent.

It's not uncommon for hedge funds these days to even get into bidding wars.

Some companies like Point seventy two pay tens of millions of dollars to secure the people they want.

You're listening to Asia Centric from Bloomberg Intelligence.

I'm John Lee in Hong Kong.

I'm Cuid Dimitrievals on Hong Kong, and today we're discussing the hedge fund industry, strategy and talent with Jay Law, president of Diamond Asia Capital, a regionally focused alternative investment manager with about five billion dollars in assets.

He also previously managed SAC's activities in Asia.

Jay, Welcome to the show.

Thank you.

Jay.

Diamond started off as a macro hedge fund at your fund transition more towards a multi manager platform, i e.

A pod shop.

Why did you make that transition.

When Danny and I came together in twenty twelve.

It was a vision to build what we have today in a way many our investors and a lot of old friend of mine has been sharing with us and said, what took you guys so long?

So if you give you a little history back, I worked for SAC Capital.

I worked for Steve Cohen for ten years, my first five years at a US headquarter, and in two thousand and seven he sent me to Asia.

Back then, Asia did not have these pod shops.

In fact, none of the large competitors that you'll be familiar with were establishing in Asia at a time.

So in the next five years, I was fortunate enough that Steve gave me a sufficient runway to have figured out in twenty twelve.

By the time I left the SAC to joint Diamond, I gave back a program I believe it was fourteen different profoto manager teams that would have been the first hot shop structure that was uperating at scale in Asia.

So Danny started Diamond in two thousand and eight as a single s or macro fund.

As you mentioned, by twenty twelve, Diamonds macro fund was at two point five billion, which back in two d and twelve was a very large size, and he and I've been talking for a while.

I got a call from him basically I said, look, you know, how come all of the large institutionalized hedge funds alternative asset platforms were US firms where we Asians couldn't do it.

So I bought into that pitch to come over and try to join force, bring my equity set or knowledge, so you know, collectively going towards building the smulti strategy MULTIPM platform as you.

Have today, just for listeners who aren't aware.

So pod shops are sort of like a bit of a different structure.

So you have teams and each team has sort of a different strategy.

Is that right?

Is that the way we look at it?

Yeah, that's the right way to look at it.

And you know, I was fortunate to join the industry, believe it, joined Steve sac back in two thousand and one.

That was the early stage of the hedge funds.

I call them the previous generation hedge fund titans started to evolve from in the beginning, most of them were managing money by themselves.

And then what's the next thing you do?

You start hiring your friends to help you manage money and at some point the next step is to just bringing talent, just just pure skill based talent where you can in trust them, giving them an environment, give supplying them with resource, letting them be the ones making the primary investment decisions, and you provide an infrastructure.

That's the beginning of the pot shop.

And what are the inherent advantages of a pot job?

Because traditionally, if the public thinks of hedge funds, they probably think of someone like a George Soros or Julian Robinson who ran Tiger where they take big concentrated bets on a stock or maybe like you know, like an asset class or a currency.

But pot shops are different.

But there's little teams.

Can you explain why this strategy works?

Right?

See?

From an investor perspective, and to refer to what I was saying about the first generation of hedge fund titans when they evolved these pot shops, the most important element is how do you go harvest these uncrelated scale based returns at a scale.

So from an investor's perspective, when you are investors with a single manager, you are relying on that CIOs his ability to direct you to a different asset class.

You rely on your source to tell you this is a year we go pound sterning.

The next year we go to Japan on the pod shop.

Like we have sevenified performer managers today, they tend to be specialized in their own respective area.

We're allowing each one of them to make investment decisions completely on their own in their areas of expertise.

And because the air structured to be specialized, and because they air structured to go for the absolutely return, the average creentation of these different return streams are relatively low.

In our case, we can achieve a average corredation of under five percent, zero point zero five.

So put down your portfolio construction and theory.

That's how you get a stability of a return.

So from an investor's perspective, the biggest attraction of these pod shops of all time PM companies is the stability of the return that they are receiving.

And if we talk about Diamond specifically, I mean there's probably diversity and returns and strategy from these different pods that you have in these seventy five different managers.

What strategies have been would you say the most successful over the past year, because we've seen a lot of volatility.

So we are structured across both the macro and equities.

Again, when Diamonds started, my partner Danny, he started as a macro PM.

By the time we combined a macro and equity business together, there's like already twenty different profolio managers.

My background was on equities.

I joined diamond in twenty twelve and in twenty and fourteen single perseverem Tamasak.

You funder the equity built out of the business.

So by the time when we combine the funding to the pod shop structure, we already have seven or eight different equity managers.

So for us, it's that diversity of the managers across different asset class and across different geographic regions.

That's the source of the stability.

So for example, last year, half of the return was from coming from the equity long short last year.

The phenomenon last year is for the first two three quarters, macro has to be a challenge in strategy, not just for us but for a global competitors as well.

But because we have the equity piece of equity was powering through providing the stability of the returns for our macro managers to be patient.

This year.

The first two three months the equity has been challenging.

Again, it's not us looking across the space as well, but Macro was driving the return.

So the answer to your question is we don't know ahead of time which strategy is going to do well not do well.

But the power of having these multiple different strategies uncreated is that at any given point some group of strategies are going to be performing well, giving you the stupidity that we're producing for the investor.

And could we delve into just like to get some examples, could we delve into some of the strategies that have worked, Like we've talked a lot on the show about PopMart and the Chinese consumer winning in certain places.

You know, did you have like a long on PopMart by chance?

The other different shating thing about a pot shop.

Differential from these single CIO funds, like we rarely talk to the investors about our positions.

I'll tell you why, because we do not have significant exposure on any single position.

That's where again the diversification is about are we LA and Poper we are?

You know?

One of my Profuno manager in one of the investor meetings, my unversor ask them hey, tell me why about this is a.

La boo boo boo?

What is about it?

I can comfortably tell you I do not fully understand that thesis myself, however, or the value I'm providing.

There is then identifying the PROFILEO manager and be able to say I trust this PROTFILEO manager because he's had many years of experience, not just including in Naboubu, but investing in some of the other companies, and as he's been gone through the ups and downs.

Therefore, we were able to invite him to come to manage a slice of a capital and given him a mandate that as so long as he's within the risk limits.

You hear a lot about these part shops talk about risk limits.

So long as he's within these risk limits, that he's fully empowered to makes his investment decision go along on la boob or.

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Your returns are being quite strong this year.

Like I read that your returns year to date up until the end of August is up twelve percent.

So that's outperformed a lot of your global peers.

Can you explain why you've been able to have this outperformance.

When we merge the found together in twenty p twenty, it was actually the unset of COVID.

In fact, our funds started trading the very first day after the lockdown of UHA.

It took a bit longer than we were planning to hire the adequate number of PROFILEO managers to achieve this level of diversification that I was describing to you about.

So you were hiring during the pandemic.

Basically we learned or hired during a pandemic.

We learned hired pandemic.

This kind of path structure found the stability is rooted on the diverse number of teams of profonno manag With a bit of a benefit of hindsight, you need about at least of forty PROFOTO managers to be able to give you this level of stability.

Once you achieve this magic number for this my number, maybe other people have a different number, then you're able to fully entrust your PROFILEO managers for them to make bottom up decisions.

To give you an example a career which just came out of short sales band, we were not at icy level tenning our career managers what to do during the short sales band.

We were there supporting them because there's the expert, there's a front line.

Their decision subject to the risk guideline that we set for them.

Are much better at guiding the profile asset locating decisions than let's say Danny or my partner said or was able to call on from the top down level.

So the performance of this year, in my mind, is really a continuation of the power of the platform.

We've been pretty steady ever since we cross that forty profilo manager mark.

These days, it's pretty hard for me to painpoint do one trade right.

Back in the Macro days, it was all about Danny making the right call.

You know, if we had a fantastic month, fantastic year, it was because Danny got the daughter yet right.

It was any country or any sector that has done.

Actually no, I mean would been profitable in every country we're updated in and every country we are marketing neutral or neutral to the country or nature to the sector.

In some of the countries were neutral to the factor as well.

Any surprises, like anything this year that you know you're looking at returns or you're looking at performance and you're like, oh, I didn't think that that would do so well.

Any point, there will be a surprise.

Let's say last year, the surprise at the beginning of the year was that China marketing on shore China Alphas suddenly came back in Q one last year.

We did not anticipate that.

If you recall twenty three, it was pretty miserable years for any China natural manager because it doesn't matter what you do, you always lose money.

With a better benefit of hindsight, we now know those were the two years where then the global investors were pulling money away.

It's like, it doesn't matter how good your company's earnings are, the stock just doesn't go up because someone is a consistent setting pressure.

And we did not know that.

But it was the first quarter of twenty twenty four we started to see the China, naw shore managers started to performing again.

I'm using the story to emphasize the point a lot of earlier is that today our job as an investment committee, as an ex CO is not about go picking which opportunity is going to be right for the next month or next quarter.

Our job is going pick the individual, to pick the talent to then invite the talent to come to say come to work for us.

You don't need to run your own hedge fund.

What provides you everything you need capital, infrastructure, corporate access, AI tools, So you focus on what you're good at.

That's really the source of it.

And any point is always surprised.

What's the surprise this year?

The fundamental luntual equity as a category was struggling for the first three months.

Again, I don't think we're only one and it was kind of understoodable because you have President Trump imposing tariff friends and full and a lot of binary situation, so as equity investor, it's very difficult to place your bet in this binary situation.

What we did not know was that the low point of the equadininuncial performance was a day after the announcement of the Liberation Day it was like ooh, after Liberation Day announcement, all of a sudden, all the bad news starting and market started behave rationally.

I want to emphasize is we did not know that.

I'm only telling you this was after effect of looking at a performance saying wow, that's interesting.

That was a low point.

Jay, you mentioned that the most important aspect of your job is to find the right talent.

Now, there's been a lot of media reports that you know, head funds in a battle or a war to recruit the right talent.

Some of the large pot shops like Millennium, Citadel, Ballyosny, your old film, like Point Sift two, they're paying tens of millions of dollars to get the star Trader.

How can you manage that?

And how difficult is it to compete with these large guys.

It is difficult.

But I want to say is in Asia we're the incumbent.

You know, when I first came in Asia in two thousand and seven, these pot shops did not exist.

I think at the time Cenada was probably had the largest presence.

They were in newspaper front page taking out a large four at Chatterhouse.

My partner Danny was part of that cohort, and in two thousand and eight they pretty much completely retweated.

So over the years, in my time on the equity side and Danny's time on the macro site, we were the first group of people in Asia that were hiring perforno managers, training portformo manager and providing environment for them.

I would not have dreamed to compete with little large shops in New York or in London.

I just don't have the edge.

But in Asia this our home turf and for our perfornal managers, I mean, the hiring of talent is also quite different in twenty twenty five versus back in twenty and seven to eight when I was hiring for Steve Cohn.

Back then, my job was about finding who are these hire boat managers are?

Who are the managers who has a track record of managing market neutral, be able to manage towards a very tight Joe down risk limit that this platform requires, and go explain to them that you don't have to run your own hedge FuG and join one of these platforms.

You'll be highly satisfied, You'll be paid very well.

Back then, I was a job that is not a case anymore.

Today, all the big boys you mentioned are here in Asia.

Every good performal manager out there, they already know which are the good platforms they want to work with.

We keep telling our bid teams for the type of manager we are trying to hire.

They are hiring us, it's not where're hiring them.

So what I translate to my answer to your question of how do we compete, it's not a out go say, competing on the terms or competing on the dollars, is about building the right kind of firm that these people we like to attract, they would like to prefer to work with us as opposed to most of the larger platforms west out the Western firm.

So quick question to your answer is about building the right culture where people would like to come to work with us as opposed to larger global platforms.

And how much would you say a portfolio manager in Asia is making these days?

You know, because we did see like zero point seventy two had hired someone earlier this year approached a tech analyst for about fifty million dollars.

I mean, I know it's not just about the dollars and cents, but you know, is there sort of an accepted number that you start at.

Every global platform tells their BD team business development team, which in our industry, the business development team is a team who's charged to hire people.

They're not called HR, they are called the business development team, which shows you in our industry how important we put this talent acquisition.

As so in most of global platforms, the instructor business team to hunt for only the whales.

The wales definition in Asia may have changed in these days, would say cover take you make a one hundred million of dollar p and L every year, and there are not too many teams in Asia who's being able to consistently produce that number, So maybe that gives you a scale.

So I do not know where that biot numbers come from, but yes, we hear large numbers as well, but I'll say, like one hundred million of dollar PNL it still considered a weale in this region today.

And just a follow up, so you have seventy five portfolio managers, you said, are you looking for more?

Yes, we are.

I was asked by one of our investors, how many managers do you want and why do you need so many more managers?

I think the answer to that is that if I go back to why this pot model again, going back to the last generation, the Steve comes the word how they evolve the small it was because they need to scale these uncorrelated skill based return And there's the important thing about skill based return is it does not scale very easily.

I personally work with Perforna manager who are extremely good, extremely consistent and perhaps making ten million your daughter, And when you give the same manager more capital and try to make make make twenty, it's foder.

So for us, the core of our business is go hiring these best people and try to work with them.

We position ourselves not as our employeeer.

We position ourselves as a partner to our Perforna managers to help them grow, to help them scale into larger piano production.

It's like, it's their business.

That's language we use.

It's your business.

How do I work together with you to scale your business from ten million to twenty minute, to thirty million, to fifty minter to one hundred minute.

And we do that manager by manager.

So that's the reason we're constantly in this market looking and hunting for the very best talent, the very best athlete, and then try to invite them to join our platform, try to grow with them.

Jake, where do you get your talent from?

Like?

Is it other hedge funds?

Is it traders on like at investment banks, but you know they've been sort of cutting a lot of their trading book over the last few years.

Is it like long fund or mutual fund managers.

Maybe Steve is calling you and saying, got this applicant, Maybe you'd be interested too.

In two thousand and seven, In earlier days, a lot of these talent were from investment banks, but as you know post GFC, most investment banks have reduced to their risk taking activities, so that school of training unfortunately has been shut down.

I recall I think twenty fifteen, maybe it was the last year one of these large global competitors that you mentioned previously, they took out a very large prop desk in Japan.

That was the last large prop desk accredation I could think of.

So today half our hires, about fifty percent hires a bit more are from these other platforms.

Other platform has now become these new training schools.

So in the pursuit of these larger platforms in ahl for these big whales and when because there was a lack of whale.

So what they do is once they hire someone has potential, then they thrown monstable resources to this perspective whale and help the individual grow into a whale.

In the process.

A lot of newer people get trained in the process and some make it, some not make it.

Sometimes a brilliant junior felt his potential would be capped by the senior performance manager and they choose to leave.

Those were the opportunities we have.

And then there's the other half of hiring are from these ASIA multi threats, so people tend to use multi SPAT and a MULTIPM potch up a bit interchangeably.

The difference to me is that in our type of MULTIPM model, PM is at the center of our activity.

All of the investment decisions are made by the performer managers versus most of the traditional asia's multi stats there's still a single COO model.

So if you are a profilo manager working at these multi swat, you have a CIO boss who's going to tell you why are you so long on China?

I'm beared on China.

So that these group's collectivity tends to be a training shop where they're best performer manager at some stage when they're mature, they tend to want to leave to have their own portfolio.

It's either US or one of those global platforms.

So let's say that there's someone out there that you really want.

You know, you have your your meeting and all of the team decides it we want we want this guy or we want this girl.

Can you tell me a bit about you know, just I'm personally curious, what is the courting process for this individual?

Is it simply, you know, you reach out on LinkedIn or you send them an email, or is it something a bit more intricate, Like I imagine these people are very busy.

You also probably want to stand out, you know, as a company.

So how do you kind of go about that?

The courting process probably have started two to three years ago to three years ago.

Oh wow, Oh well, okay.

They Tier one players in this platform business have their in house business development team.

This tends to be individuals who are fairly experienced, fairly senior.

A lot of them have previously came from a bicycle, came from seal side.

They're able to have this dialogue with profoitio managers risk takers.

Even though when a risk manager is not looking for a job.

So our philosophy is that we're not looking for people who's looking for a job.

If I just do that, I can sit here all day long wait for the resume to show up.

And unfortunately there's a legative selection processing there because better individuals they're not looking for a job.

They you know, they're never looking for a job.

So it's a research driven reverse process of figuring out who is good in which sector and the systematical go court, go introduce ourselves to the individual before the individuals looking for a job.

How do you introduce yourself?

Dinner, champagne and sushi.

A lot of coffee, and used to be a lot of drinks too.

I don't do drinks anymore, but I know my team's do.

It's about the marketing your firm.

It's about sharing with the perspective candidate you believe one day you may want to work together.

What is our proposition the question you asked me earlier, why Diamond?

You know, if one day you were getting an offer from Diamond and one from points I mean two from an indium from Cereda, why we think you should seriously consider Diamond despite our found is three point five billion and their founday sixty billion.

It's about that process.

That process does not happen after the candidates.

I'm looking for a job.

So that's the first part of process is we call the business development process.

It's kind of dating process that you know, we're introducing ourselves to the candidate and through the process we're understanding the candidate of what's is this person's edge, what does it care for?

What is a career plan.

It's a lengthy process.

Sometimes it goes on for years and then at some point something happens.

In our industry, something always tend to happen.

It can be many things.

We called a catalyst, so I make Canada say I'm ready to move, and he's going to reach out to a few people that he felt comfortable with in the multi year dating process, say I'm ready to move.

I like to come into an interview process.

Then we switch on the interview process.

I think every firm does a bit differently.

This is where seriously go and come down interview with score to night's number.

We talk about winners and losers, etcetera.

Then we make a decision out we really would like to work with this individual and let's see if we can cut a contract.

How many more of those editions could we see this year, potentially.

Anywhere between probably ten two twenty.

Oh, adding ten to twenty more profolio managers.

Yeah, I mean this industry.

Unfortunately, I thought you were already going to ask me.

It's a performance streaming industry, which means that despite our intent, there's going to be a number of managers at any given year who's going to leave the platform.

Right, it's the necessary nature of a performance business.

We speak of that.

We're running a high performance sports team.

We're inviting all the team members to come to play.

Everyone come to play for the team, and we do our job to support everyone and make sure everyone's well taken care of.

But it's your job to perform for the team at some junking.

At some point when you're not performing anymore, you may have to be asked to leave the team.

So there's that attrition of a manager as well.

Again, not us, but this is across all the platform models.

We were talking about that yesterday.

Actually, yeah, look, I love this analogy of comparing a HHE fund manager to a sports star.

And interestingly, the co founder, Danny Jung stepped back and he became a coach.

That's obviously got like a sports analogy.

Can you tell us what a coach does in edge funds?

So we have today's seventy five profileal managers.

That's seventy five partners we have.

That's seventy five individuals who, by virtual of them being in the seat, have done something very fantastic, has achieved quite a bit in their career.

That's why we invited them to them.

Every single one of them has their own career development plan, and we've positioned ourselves say we're going to be your partner.

We're gonna help you.

We're gonna help you get into new markets, we're gonna help you hire pms, We're going to help you get through this mental hurdle of like every time you have more capital, your performance start a job.

What's going on that by itself is a full time job, right, and we're gonna have to also defend our best people when our competitors come to say you should come to join us, I'm gonna give you this package.

You know, all those add up to full time job.

Okay, Like the sports industry, is there a period we like you just become too old to hit fu manage.

Do they have expiring dates, butuse if you think of like for example, like the NBA, if you got a good career, you got a fifty in your career, what's it like in you know, being a h FUM manager in a portrait.

We actually done a study the corredation between age of a profile manager and performance.

Now we know our larger global competitors also done that.

But of course you know I wants to talk about it.

What we actually conclude is not the age.

We use a phrase called a vintage.

It's like when you became a profile manager, the first few years your industry, your first mentor your secondment or your third mentor someone taught you how to invest.

There was a particular setting.

It could be maybe it was an environment on equity side, maybe that was an environment there was a China was going to hyper growth face.

All you needed to do is to identify the right sector and the best company within the sector be making money, and then that region will shift, will change.

And nowadays China is not a single one way growth market anymore.

I'm on nu ones.

So some of the managers are able to make that so that transition.

Others could not.

So this is a dvantage concept that we believe that for some managers there's no definite number of years.

But for some managers when the market WHICHI shift, when the environment where they were trained to make money changed, some of them may not be able to adapt.

Then that's our shelf life.

What else was in the survey?

Were there any other interesting findings?

If you were to survey all of the population of the perfuno manager across all the industry, if you're able to have that data, you probably find most of the managers fall into the relatively younger bracket, maybe the mid thirties to mid forties, you probably see the most of that.

So that's your starting observation.

So then that begs the question of why is it age?

Is it like the sports like past some stage, past some age, you just maybe your brain doesn't work as fast anymore, or maybe we speculated maybe it was a hunger level.

Maybe when you're younger, you're just more hungry and we still have children.

When you made money already, you're no longer.

But then we look at some of the very successful managers.

They don't need money anymore.

It still works the same part, They just like it.

So when we end up concluding it's not an age, it's not the money factor, it's not a bradd It is the vintage that that's the most important.

JF.

You started this career in the early two thousands.

What's the big difference between the attributes of a successful edge fund manager now versus say like two thousand and eight or two thousand and five.

I think specifically for Asia before Asia Financial Crisis, Asia was by and large emerging market that the stock price was largely driven by the flows coming from US, coming from London.

Those are the flows typically were directed by a discretionary fundamental manager worked for one of the larger global houses.

So to be a good Asia profilio manager, to be a good Asia head for manager, a lot of what you need to do is to be there when that tide started coming and be able to pick the best companies within the sector, within the country where the growth is and you can largely make it.

Hedging was quite challenging at the time, so you can probably be forgiven if you can just lose less money when that tipe receives Asians market is very different now in the last five or eight years.

You know, like most other managers, I mentioned earlier.

Today runs market neutral, runs country neutral, runs secretor neutral.

That was just not possible in two thousand and seven.

In two than eight, if you look at the flow you know today the international flow is still important, but equally largely the amount of the domestic participant.

Some of these markets are well known.

In China, it's still more than seventy percent of the turnover is still doing by the retail.

Korea number is roughly similarly here, but if you look at the two seven two than and eight career retail participation was maybe about twenty to thirty percent.

So you need to be a lot more tuned in into the nuance of what's going on in your local market, which also brings in one important oppostation I want to mention here.

I think even in twenty twelve where cold there was a paper by one of the famous hedge fund consultants, very very well long hedge consultant industry making observation that back then it was still quite popular for the CIO or investment team of Asian hedge fund to be based in London and to be based in New York.

In fact, if you go back to the media back then, you can find quotes where people say that's where it's how supposed to be because Asia's aserprise is they actually driven out of the West.

Nowadays, it's a non starter to have an investment team who's not based in region.

If you're not here, you're just not in the game anymore.

And what has that been like?

I mean, you're an Asia focused company, you also have been here for many years.

Now, what are you noticed?

Are you noticing more competitors coming in?

Are you seeing more capital flowing to the region.

We're noticing a lot more competitors coming in.

I think all of these larger global pod shops that you were mentioning earlier five years ago, they were starting to have some substance in here ten years ago.

Most of the oct even starting here, we're picking up a huge amount of interest from really from the alpha hunting community, both from the allocator side and from the head from manager side.

That recognizing Asias having gone through the transition from a market where you only come when you think there's gross two Wow, even when gross is in question, it's still bounty for alpha harvesting market.

Who's coming in like anyone.

In the past year that everybody, everybody, I don't want to name my competitors, but talk to your broker friends.

At one point I was told there were fifty pot shops hiring, Like, I kind of make that count, but a lot of five zero.

I know it's ridicular, isn't it.

I didn't know if I were believe the number, but I do hear you know so and so large part shops are starting to hiring one Asia person to a hear person.

Her was very, very high.

If you look at I Think Government in their twenty twenty three survey labeled global pot shops number at somewhere between fifty to eighty in their number most everyone wants to have Asia exposure, but the ones really have Asia's presence and can effectively compete in hiring probably can count with a single hand.

It's not for lack of demand, it's the lack of talent.

Jay this you know.

Cutia and I had this discussion yesterday and she was saying, like, why it's so hard to find really good fund managers.

There's a lot of smart people out there.

There's probably a lot of people listening to the show that have had good returns on their stock market returns, the investment portfolio.

Why is it so hard to get a good star manager.

You need to have some better mentorship teaching you how to do this type of investment where it's largely scale based.

You try to filter away anything that you don't feel you have a strong edge, not market neutralauncial equity.

What you do is you filter out the beta exposure to the market, then you filter out the country exposure, then you filter the second exposure.

You need a bit of mentorship, then you need someone to be able to supply you that capital to try it out.

In two thousand and seven, the only shop that was willing to give you this opportunity was a prop desk that was gone.

And then in the last few years you have a lot more of these Asia's homegrown multi strategy funds on one hand and the large global multi slad on the other hand to continue to come in to provide that type of training.

So the supply has increased significantly, that the amount of time available has increased significantly, but it's still not enough.

There's still another fifty or probably more or part shops are waiting to set up shops in Asia.

So what do you look for then, Like let's say someone's listening they're in university right now or just starting their career.

What are you looking for in the personality?

Is it just returns?

Is it the track record?

What are you looking for?

What should they study like too?

We interviewed someone and they mentioned that Jane Street doesn't hire people with business degrees, They hire people with like science and maths.

Is that where it's going?

If I were to look at the career growth trajectory of a PROFILEO manager most everyone, typically you start from being an analyst.

This is where you learn from whatever mentors by doing work he doesn't have time to do.

Manage spreadship for him, do the corporate conference care for him.

That's just how you typically get to learn what the good performer manager actually does.

Then your career progresses through you become a senior analyst.

Now you have a beny bit to start pitching the ideas.

Now you learned something you apply to your own current universe.

Through that process, you gain this knowledge into initially typically a selective number of stocks cluster around a sector around the country.

That allows you to have better insight than everyone else who's okay, the same thing we call the edge.

That's what's driving your alpha at some point when you need a break, someone need to give you this amount of capital to set Now you can try this performo manager on your own, and from that point you start having a track record.

So every firm is I guess, specialized at different part of this career progression of this profoio talent.

Some are in I guess analogous of a venture stage training the talent fresh from school, right that requires a different skill set.

Some firms in h are particularly good at it, we're not good at it, and some on the other end, I guess more anatogus to the kind of pe you just go pay the big price to hire someone who's already extremely mature that you say, I know you've made a lot of money elsewhere, now I'm going to be a billion dollar and please come to it for me.

We've seen examples like this in recent Asia history.

And then what we have been particularly good at is to identify and work with the talent who have already figured out how to make money.

So we're not very good at training people who doesn't know how to take risks, who does not how to make money, but we're good at working with someone who have already learned how to make money from their previous mentors, but the need of a partner to scale up from being able to make ten million dollars to twenty thirty fiftreemen do.

That's all we focused on.

So what do we look for?

Because of where we focused on?

The starting point is a track record despite the past performance is not an indicator for future.

It is really the lacking of everything that's the best indicator.

So we tend to start from there.

Then we go a lot deeper trying to understand what's a methodology behind the numbers?

Where the number come from?

Can we reasonably conclude that taking you out of your previous cheap where you made that money, to a brand new team where we tend to set you to be fully independent, you no longer have a sale or tell you, oh you should cut here, you should dubble down there, no longer have that crutch.

Can we still reasonably assured the alpha source you previous the hat that can be replicating here.

That's where we make a bed where to this study.

Honestly, we don't care particularly much.

And I've worked with perform managers for English majors who are philosophy majors as well, as science majors.

It comes down to the individual themselves.

It's not so much about what they learned in school.

It's about everyone coming to field is already very smart and probably already work very hard.

Then there's a chunk of that, maybe seventy eighty percent of that.

It's just you being passionately, be focused.

You'd be good at something, You'd be better at something than most everyone looking at the same thing.

There's a bit of a I call it almost a science part of it.

If you're dedicated to it, you'll be able to get there.

Then there's a sum am I called it ten percent, almost an art element of that as our touch to be able to consistently make your money and still be able to manage throw a very tight draw down framework.

We don't particularly know how to identify that.

I don't know, maybe have a debate.

Some people say it's trainable, some people it's not, and that's where we rely on the track record.

That's great.

Thanks so much for joining us today.

Thank you, it's been a pleasure.

You've been listening to Asia Centric from Blueberg Intelligence and Cutch did mutrievea in Hong Kong.

I'm John Lee also in Hong Kong.

You can listen to all our episodes on Apple Podcasts, Spotify or where you listen and this podcast was also produced and edited by Clerge and thanks for listening.