If you’ve ever wondered what it would like if a legendary hedge fund founder created their ultimate buy-side investor, piece-by-piece like some sort of golem, look no further.
Get Morning Coffee ☕ in your inbox. Sign up here.
Speaking at the Alternative Investment Conference (AIC) hosted by the London School of Economics (LSE), Balyasny Asset Manager Dmitry Balyasny did exactly that – and there were four things he named as crucial traits.
The first is what he calls “the right psychology”. There are two sides to that particular coin. “From a risk-taking standpoint, you need enough confidence to take meaningful risk and tolerate the volatility and tolerate drawdowns and not drive yourself crazy,” Balyasny says. “You have to have a fairly stable, confident personality.”
That doesn’t mean being some sort of chest-bashing barbarian, however. “On the flip side, you need a good amount of humility,” Balyasny says. “Because if you don’t have the humility side of it, you might make a lot of money when your strategy is working. But if you lose a lot, it can blow up. So you need a balance between those two things.”
Confidence and humility aren’t just static concepts, however; they are things that need constant work. And that means being “somewhat introspective. Constantly working on your game, constantly working on your process, and trying to figuratively improve it,” according to Balyasny.
All that being said, possibly the most important part is mental resilience. “Trading is a rude awakening,” he says. “It doesn’t matter how smart or talented you are, at some point, you’re going to have a hard time.” Pushing past setbacks is probably fresh in Balyasny’s head – his fund recently lost $100m via a US credit portfolio manager.
The last thing on his dream investor’s list is passion. “That usually comes through pretty clearly,” Balyasny says. “If you can get somebody who really loves what they’re doing, who would do it for free as a hobby, and combine that with a good process and a good psychology of iteratively, constantly improving – that’s the ultimate combination.”
High praise – if you can manage it. Balyasny was quite recently touring university campuses in the United States (including MIT, NYU, and Princeton) looking for the “best people”, the kind his firm likes to hire. If you think you fit the bill, get your trigger finger ready – the fund is hiring interns as we speak.
Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)
