No one in their right mind wants to go back to what pre-retirement medical professionals call the “Old Town,” with its daily cocktail of alcoholism and nepotism, lax work practices, and vile treatment of women and minorities. But on the other hand there is a distinct lack of joy in modern industry; too many people act like they’ve been condemned to finance it. London needs people like Bill Perkins, who is setting up a new office for his hedge fund there, to show them how to have a good time.
Perkins is a legendary natural gas trader who has run Skylar Capital from Houston for the past decade. He has been described as “The Last Cowboy” for his intuitive investment style, taking big directional bets and tolerating volatility rather than allowing quantitative models to weed out small gains. According to Bill, “You can’t pay me enough to sit in front of a screen and throw my life away.” And that’s definitely how he lives.
In 2017, his Instagram was described as “famous for photos of his Caribbean-based yacht full of bikini-clad women.” Looking at it now, there are still plenty of water toys and party pictures, but there’s more of a grown-up vibe; In 2020 he married for the second time. He also appears to have given up producing films like After.Life and The Baytown Outlaws (a look at the reviews of this one too might suggest why). But he has written a book called Die With Zero that lays out his philosophy on life and how to deal with money, and it’s in the form of an anti-saver guide to personal finance that suggests that if you have $250,000 in savings by age 75, that’s at least $200,000 in missed experiences. Or in Bill’s case, why it might be worth paying $15,000,000 for a $200,000 painting if you really want it. He also claims on his website that he spends much of his time traveling to poker tournaments and managing his business from a yacht via smartphone.
As a way of life, it’s… fun, but perhaps not attuned to modern fads in institutional attribution. It appears that the actual fund is managed in London by Nathan Arentz and part of the team he led as head of Glencore’s natural gas trading operations. We don’t know how much of a hedonist he is, but his LinkedIn recommendations don’t seem to include “wakeboarding in St. Barts” or “funding poorly-reviewed thrillers.” Skylar Capital might only really be the liveliest hedge fund in town when the boss is over.
Elsewhere, Tarun Chitra of crypto software provider Gauntlet shares some of Bill Perkins’ take. A former Wall Street high-frequency trader, he says his quant peers “are not willing to do anything with a tiny amount of risk” and that “life is a little too short to focus on it all the time.” But missing Perkins’ massive net worth (and perhaps not quite having the same cowboy swagger) he used a quirk of the quantitative labor market to reduce the risk of starting his own business.
This quirk is that because quant trading shops are extremely paranoid about their intellectual property, they tend to enforce very long notice periods and non-compete agreements. In Chitra’s case, that meant he could spend two years having Vatic Labs pay his salary while he explored whether he could turn his passion for crypto into a viable business. Its co-founder, Rei Chiang, was also a former quant, and it seems that they managed to assemble almost all of the initial staff simply by phoning through the social network of former quants who decided to take a break from it all, and who were sitting around collecting the money from their non-competitions.
The phrase that comes to mind is “good job if you can get it”. Of course, if you do something like this, you need to make sure that your startup is definitely not viewed as a competitor, which might become less likely as crypto becomes more integrated into the financial system. But as a perk of quant living, it’s worth keeping in mind; It might even be worth mentioning for HFTs looking to compete with tech startups for top talent.
In the meantime …
Maybe it’s the price action in natural gas, maybe it’s the gradual development of the local financial hub, but Bill Perkins’ home state is becoming an increasingly rewarding place to work. Salaries in Austin, Houston, and other major Texas cities reach the same average levels typically found only in New York and Silicon Valley. (Blumberg)
Aureus Asset Management’s Karen Firestone had one of those “zoom call moments” when her dogs barked uncontrollably and an unidentified man in his underwear faded into the background of her interview with CNBC. (Daily Mail)
Case studies and even written exams are not uncommon in graduate education programs, but if you want to join Goldman Sachs’ wealth management team, you apparently have to go through frequent “verbal skill” sessions designed to take business school graduates and teach them the Leave jargon behind and stop talking like an idiot. Most customers are boomers, so you’ll need training to leave voicemails, too (Business Insider)
Senior bankers and wealth managers had to report more than 700 cases of “non-financial misconduct” last year. About 600 of them were related to breaches of COVID regulations. (Blumberg)
Ken Griffin’s Palm Beach neighbors are apparently upset at the “unreasonable size” of the mansion and lot he’s building for his mother. Court filings complain about a potential impact on neighboring billionaires’ access to the beach, but it’s hard to guess they’re only hurt because they’re constantly reminded there’s someone richer than them. (New York Post)
Another billionaire banker with a mansion is having less fun – Petr Aven is under sanctions so he has to get a court to agree to freeing up his accounts so he can pay for “basic needs”. In context, that works out to $140,000 a month, much of which is spent on insurance and collateral for his art collection. (Blumberg)
Photo by Volodymyr on Unsplash
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