Prediction Not checkable as stated
Bobby Jain: The hedge fund sector will become a talent development industry
“It's going to become A talent development industry. Whether it's talent development, talent acceleration, the people are going to start molding people into the way that they think of the world, and those worlds will be different.”
Insight
Bobby Jain: Multi-manager capital allocation is more static than perceived
“The capital allocation model is a lot more static than you'd think. If you look at most of these multi-manager firms, it doesn't change all that much over a period. In certain market environments, you're moving capital to one place or another, but that's not t…”
Opinion
Bobby Jain: Skeptical of empirical models, favors factor-aware over factor-obsessed approach
“I'm generally skeptical of models, especially empirical models. So I'm more in the factor aware than factor obsessed model.”
Insight
Jain: Multi-strategy funds make money in high vol, lose during transition
“Generally speaking, in these models, you make more money in a high-vol environment, but you lose money in the move from a low-vol environment to a high-vol environment.”
Insight
Jain: Cutting risk during stress lets funds trade on offense post-crisis
“I view it as the reason you're cutting risk in a time of stress is it might get worse. So you're trying to hedge. The bad news is you're locking in a bunch of losses. And you're paying a bunch of transaction costs. The good news is, when things settle down, wh…”
Insight
Bobby Jain: Early on, pushing PMs to take risk is harder than stopping them
“In the beginning, it's harder to push people to take risk than it is to stop people from taking risk.”
Assertion Not checkable as stated
Bobby Jain: Private Credit Boom Leaves Opportunities in Liquid Credit Markets
“The private credit business has been the biggest growing business in the world in the last few years. That leaves some opportunities in the credit markets.”
Insight
Jain: Fixed income liquidity disappears much faster than exchange equities in downturns
“People who grew up in the equity markets are used to exchange traded markets. You go into fixed income markets, suddenly liquidity disappears very quickly when things go wrong.”
Opinion
Jain: 2009 and late 2020 were the greatest times for hedge funds
“Generally, that next period is a very good period, despite however anyone did in March of 20, or in the last quarter of oh eight, oh nine, and April to December of 20, were by far the two greatest times in this market.”
Insight
Jain: Institutional boards divide into diversification-focused risk managers versus concentrated investors
“As you get into these large organizations, there are two different ways of thinking. Some people are like risk managers. Let's diversify. And some people are concentration. Let's figure out where things are going to go and let's go there. It's no different tha…”
Assertion Not checkable as stated
Jain: CSFP Index Arb Desk Made $50M In First Year
“The guy before me made ten million dollars in P&L, making 40, 50 grand a day. My first year, we made fifty million dollars in P&L.”
Assertion Not checkable as stated
Jain: Arbitrage Trading Desks First Encountered Significant Crowding in 2004–2005
“What was happening in oh four, oh five is the first time you had to start dealing with crowdedness. Some of these banks were risk arb desks, we were stat arb desks, Citadel was convert arb desks, some guys were fixed income arb desks, and suddenly the arb star…”
Assertion Not checkable as stated
Jain: Millennium evaluated portfolio risk minute by minute
“One of the things that you also learn in the banking sector is we're heavily marked to market. Millennium was one notch further, marked a minute. Why did we lose money last minute? Let's see if we could do something better about that.”
Assertion Supported
Jain: 10-day volatility spiked from 7 to 118 during February 2020
“10 day vol in February of 2020 was seven. 10 day vol two weeks later was 118.”
Assertion Not checkable as stated
Bobby Jain never borrowed money until age 50
“I didn't borrow a penny in my life till I was 50 years old, and interest rates got to two and a quarter, and I said I have to.”
Assertion Not checkable as stated
Jain: O'Connor and Susquehanna were the two original prop trading shops
“O'Connor was one of the original trading shops The predecessors to the prop shops. Susquehanna and O'Connor were the two back then.”
Disclosure
Jain: O'Connor hired him after two rapid math and probability questions
“The interview question was, what's 49 times 28? And I say 1372. They say, Mets play the Yankees in the World Series. What are the chances the Mets win in four? I say one out of 16, they say you're hired.”
