WEBVTT - Ilana Weinstein Discusses Hedge Fund Recruitment 0:00:02.200 --> 0:00:06.800 This is Masters in Business with Barry Ridholts on Boomberg Radio. 0:00:07.360 --> 0:00:10.440 This weekend on the podcast, I have an extra special guest, 0:00:10.640 --> 0:00:15.200 and this was a master class in what is going 0:00:15.240 --> 0:00:20.759 on in the alternative space. Alana Weinstein is uniquely situated 0:00:21.239 --> 0:00:27.600 to understand hedge funds, venture capital, private equity, the demands 0:00:27.800 --> 0:00:31.160 of scaling a billion dollar firm into a forty billion 0:00:31.200 --> 0:00:35.120 dollar firm, Who is moving around from firm to firm, 0:00:35.120 --> 0:00:37.960 Who are the most talented people in the space, What 0:00:38.159 --> 0:00:42.680 is going on without flows from hedge funds and why. 0:00:43.040 --> 0:00:45.560 I don't know how to describe this except to say 0:00:45.640 --> 0:00:50.840 this is absolutely an incredible discussion from a person uniquely 0:00:51.000 --> 0:00:55.560 situated in a one off vantage point to understand exactly 0:00:55.560 --> 0:00:59.960 what's taking place in this space. So, with no further ado, 0:01:00.040 --> 0:01:06.840 my conversation with Alana Weinstein. This is Masters in Business 0:01:07.080 --> 0:01:11.480 with Barry Ridholts on Bloomberg Radio. My special guest this 0:01:11.520 --> 0:01:14.959 week is Alana Weinstein. She is the founder and CEO 0:01:15.200 --> 0:01:18.240 of the I d W Group, a leading boutique for 0:01:18.280 --> 0:01:22.200 hedge funds, private equity, and family offices in search of 0:01:22.360 --> 0:01:26.399 top investment talent. Previously, she worked at such August firms 0:01:26.400 --> 0:01:30.360 as Goldman Stacks and the Boston Consulting Group. She got 0:01:30.360 --> 0:01:33.600 her undergraduate degree from the University of Pennsylvania and her 0:01:33.720 --> 0:01:38.800 MBA from Harvard Elana Weinstein, Welcome to Bloomberg Radio. And 0:01:38.880 --> 0:01:41.240 I add that because I've seen you on Bloomberg TV 0:01:41.640 --> 0:01:44.200 many times, but I don't recall ever hearing you on 0:01:44.200 --> 0:01:47.680 Bloomberg Radio. This is my first time, Barry, So, you've 0:01:47.680 --> 0:01:51.440 been in the asset management industry for more than two decades. 0:01:51.720 --> 0:01:55.120 How did you end up on the recruiting side. The 0:01:55.240 --> 0:01:59.040 short answer is I was really young and I was 0:01:59.080 --> 0:02:01.120 still trying to figure or out what I wanted to 0:02:01.160 --> 0:02:05.440 be when I grew up. Literally, Um, I had gone 0:02:05.440 --> 0:02:10.360 to HBS after a year at Goldman, So I literally 0:02:10.400 --> 0:02:13.919 went from penn from my dorm room to my parents home, 0:02:14.440 --> 0:02:18.639 worked a Goldman for a year, uh and then UH 0:02:18.720 --> 0:02:22.880 and then went to HBS. And just to go back 0:02:22.919 --> 0:02:25.240 and answer your question, I ended up going to the 0:02:25.240 --> 0:02:28.520 Boston Consulting Group really because I felt I needed to 0:02:28.520 --> 0:02:30.800 get a post m b A to my m b A. 0:02:31.040 --> 0:02:34.280 I wanted to figure out, um, what path I wanted 0:02:34.320 --> 0:02:37.200 to take, what sorts of problems I wanted to solve, 0:02:37.240 --> 0:02:42.000 what industries were interesting to me, and um and this 0:02:42.080 --> 0:02:44.200 is in the I was in my late twenties, this 0:02:44.280 --> 0:02:49.000 is in the mid nineties, so the dot com because 0:02:49.000 --> 0:02:50.600 that's of course what we called it back then, and 0:02:50.639 --> 0:02:54.920 the dot com bubble was just bubbling. And within a 0:02:55.040 --> 0:02:59.760 year and a half, my entire class of MBAs at BCG, 0:03:00.000 --> 0:03:03.160 the class I entered with, was gonzo. I was literally 0:03:03.160 --> 0:03:05.560 they'd all gone to California to seek their you know, 0:03:05.800 --> 0:03:08.200 start the next whatever. Give me a big fat slug 0:03:08.200 --> 0:03:10.560 of stock options and a stock that just goes up 0:03:10.840 --> 0:03:13.560 ten percent a day, and and everybody jumped at it 0:03:13.639 --> 0:03:15.480 and done right. And you can imagine how that ended 0:03:15.480 --> 0:03:18.440 for most of them. It depends on if they knew 0:03:18.440 --> 0:03:20.040 when to hit the bit or not. If they were 0:03:20.080 --> 0:03:23.000 smart and and took off some risk, not too bad 0:03:23.360 --> 0:03:26.519 the people who didn't, so they had gone to try 0:03:26.560 --> 0:03:30.600 to start dot com companies. And um, I that wasn't 0:03:30.600 --> 0:03:34.120 my gig. I wasn't I realized I didn't. Really, I 0:03:34.160 --> 0:03:36.520 had learned a lot of BCG. I didn't want to 0:03:36.560 --> 0:03:41.440 be a management consultant um as a as a career path, 0:03:41.600 --> 0:03:43.680 and I still was figuring out what do I want 0:03:43.680 --> 0:03:49.280 to do? And before I committed to UM any particular pathway. 0:03:49.640 --> 0:03:54.640 I figured I would jump into another milieu where I 0:03:54.680 --> 0:03:59.320 could learn again more about companies and functions and just 0:03:59.400 --> 0:04:02.280 figure out where I wanted to commit to. And so 0:04:02.360 --> 0:04:04.840 I joined a large recruiting firm, thinking that would give 0:04:04.840 --> 0:04:07.440 me a purview. And as it turned out, I was 0:04:07.520 --> 0:04:11.240 really good at it, and I fell into quickly joined 0:04:11.240 --> 0:04:15.360 their financial services practice, and uh, that's how That's how 0:04:15.360 --> 0:04:18.039 I ended up in recruiting, and so you end up 0:04:18.080 --> 0:04:22.000 focusing a little further along in your career on head funds, 0:04:22.000 --> 0:04:26.480 private equity, family offices. So what happened was UM after 0:04:27.000 --> 0:04:31.760 about a year or two, there the dot com bubble burst, 0:04:32.480 --> 0:04:34.880 and there this is this big search firm I was at. 0:04:35.000 --> 0:04:40.400 Their financial services practice was really focused more on investment, banking, equities, 0:04:40.440 --> 0:04:44.600 traditional asset management, sort of what i'll call older school businesses, 0:04:44.880 --> 0:04:49.400 compared to what I really fell into and started to 0:04:49.440 --> 0:04:53.960 focus on, which was back in the late nineties early 0:04:54.000 --> 0:04:56.960 two thousands. As you'll remember, these were the this is 0:04:57.000 --> 0:04:58.960 what was fueling the cell side. This is where the 0:04:59.000 --> 0:05:01.960 action was. It was the prop groups, and it was 0:05:02.160 --> 0:05:06.120 it was these new, first of their kind type financial products. 0:05:06.560 --> 0:05:10.239 It was called so it was credit correlation. Asset swaps 0:05:10.320 --> 0:05:14.279 wasn't even called credit derivatives back then, highly structured first 0:05:14.320 --> 0:05:18.320 of their kind derivativesy types of transactions. That's what we 0:05:18.320 --> 0:05:22.080 were focused on for the cell side clients that I 0:05:22.120 --> 0:05:24.560 was working with, and that's where the juice was. And 0:05:24.600 --> 0:05:28.240 all of a sudden, I developed my own business which 0:05:28.360 --> 0:05:32.000 was on fire within this big firm, and it just 0:05:32.200 --> 0:05:37.440 became obvious after a few years to me um to 0:05:37.600 --> 0:05:41.039 really try to do this on my own, given um 0:05:41.080 --> 0:05:44.839 I was acting effectively independently within a larger construct which 0:05:44.880 --> 0:05:48.640 was having issues at the time. So let's talk also 0:05:48.880 --> 0:05:52.680 about the timing. As you were explained that, I began 0:05:52.720 --> 0:05:56.960 to think about the timing. If we go back years, 0:05:57.560 --> 0:06:00.360 what were there two hundred four hundred hedge funds Today 0:06:00.360 --> 0:06:04.400 there's eleven thousand. Your timing into that ramp up could 0:06:04.400 --> 0:06:09.320 not perfect Barry, right, I planned it perfectly, right. I mean, 0:06:09.400 --> 0:06:13.320 so so all these and Goldman sachs Is is infamous 0:06:13.720 --> 0:06:15.839 for saying to a group of traders who they smell 0:06:16.120 --> 0:06:18.440 might be itching to head out, Hey, why don't you 0:06:18.480 --> 0:06:20.720 guys go set up a hedge fun We'll get you capital, 0:06:21.520 --> 0:06:24.480 will will prime broker for you, and we'll steer some 0:06:24.560 --> 0:06:27.400 potential clients to you. And that's how they built an 0:06:27.440 --> 0:06:32.719 immense prime brokerage business. How much was the Goldman Sacks 0:06:32.720 --> 0:06:35.240 connection helpful or as you was an analyst, it had nothing. 0:06:35.320 --> 0:06:38.600 I was literally just understand I started a Goldman in 0:06:38.640 --> 0:06:41.200 the middle of my senior year of PEN. I mean 0:06:41.400 --> 0:06:43.200 because I just was. I don't know, I was stupid. 0:06:43.200 --> 0:06:45.080 I was like working. I just I got through all 0:06:45.120 --> 0:06:46.839 my classes. I didn't have I didn't have enough fun 0:06:46.839 --> 0:06:49.560 in college. At the bottom line, I'm making up for it, 0:06:49.600 --> 0:06:53.080 trying to make up for lost time now. But I 0:06:53.120 --> 0:06:55.360 was finished with my classes. I started middle of my 0:06:55.400 --> 0:06:58.000 senior year and I was out within literally a year 0:06:58.040 --> 0:07:00.440 to HBS. So think about it. I was I hadn't 0:07:00.440 --> 0:07:02.760 even graduated from college. So this was it was. That 0:07:02.839 --> 0:07:07.480 was not what UM really what really jump started my business. 0:07:07.560 --> 0:07:10.680 It what it was. However, UM, you are correct in 0:07:10.760 --> 0:07:14.960 signaling the cell side um as as a driver of 0:07:15.800 --> 0:07:19.679 hedge fund talent, because back then it was the prop 0:07:19.760 --> 0:07:22.560 groups that were the precursors to hedge funds. It was 0:07:22.680 --> 0:07:26.720 it was these you know again, high octane um and 0:07:26.960 --> 0:07:28.680 these were the guys who got paid the most on 0:07:28.720 --> 0:07:30.560 the cell side at the time, and I even still 0:07:30.640 --> 0:07:33.680 felt like they weren't capturing as much of their p 0:07:33.880 --> 0:07:38.200 m L as they wanted. Well, you know it, within 0:07:38.240 --> 0:07:41.040 a cell side context, they were doing as well as 0:07:41.040 --> 0:07:44.560 they possibly could. Back then, you could be a superstar 0:07:44.640 --> 0:07:47.920 prop trader and earning forty million bucks a year, which 0:07:48.000 --> 0:07:52.080 which doesn't happen anymore. You could be earning more certainly 0:07:52.080 --> 0:07:55.400 than the CEO. But their buddies were leaving UM, many 0:07:55.440 --> 0:07:59.280 of whom were Goldman partners or just were um just 0:07:59.600 --> 0:08:03.440 like again, high octane prop traders from Credit Sweez, from 0:08:03.520 --> 0:08:07.040 Deutsche Bank, from Morgan Stanley, from JP Morgan, and they 0:08:07.200 --> 0:08:10.239 were setting up shop. And remember back then you could 0:08:10.280 --> 0:08:13.840 start with fifty and scale to a billion very quickly. 0:08:13.960 --> 0:08:17.000 And so and all of a sudden, there's no headwinds 0:08:17.040 --> 0:08:19.320 from any other part in the bank. There's no cap 0:08:19.400 --> 0:08:21.160 at all in terms of how you get paid. You 0:08:21.160 --> 0:08:23.960 can do whatever you want. And if you're an entrepreneurial 0:08:24.000 --> 0:08:27.720 person who is a great investment professional and that's your 0:08:27.720 --> 0:08:30.040 passion and that's what you want to do, why be 0:08:30.080 --> 0:08:32.240 part of a bank. There was no headwind to getting 0:08:32.280 --> 0:08:35.840 into this business and scaling if you could produce the goods, 0:08:35.920 --> 0:08:38.040 and back then you could do that a lot more easily, 0:08:38.240 --> 0:08:41.200 quite quite fascinating. Let's let's talk a little bit a 0:08:41.200 --> 0:08:45.080 lot about how your business works. Do hedge funds and 0:08:45.120 --> 0:08:48.560 family offices come to you looking for slots to fill? 0:08:48.840 --> 0:08:52.880 Are the traders and fund managers reaching out to you? What? 0:08:52.880 --> 0:08:57.400 What does the structure like? So, UM, let me back 0:08:57.480 --> 0:08:59.920 up and tell you, which I'm actually quite proud of. 0:09:00.240 --> 0:09:04.400 We've been in business for almost seventeen years, seventeen this February. 0:09:06.040 --> 0:09:11.120 Most of our clients we've been working with practically, if 0:09:11.160 --> 0:09:13.840 not since the beginning beginning, certainly within the first few 0:09:13.920 --> 0:09:18.480 years of inception of I DW. So what that means 0:09:18.600 --> 0:09:23.120 is we're UM, we really know their business, We've helped 0:09:23.120 --> 0:09:26.080 them build their business. And yes they are coming to 0:09:26.240 --> 0:09:32.040 us UM for specific assignments, whether it's and the common 0:09:32.080 --> 0:09:35.760 thread being they are all uh senior people who can 0:09:35.800 --> 0:09:38.319 move the needle, whether it's a someone to do VI, 0:09:38.400 --> 0:09:41.640 a t M t PM for equities UM, someone to 0:09:41.720 --> 0:09:45.000 run an emerging markets business, someone to build and run distress. 0:09:45.440 --> 0:09:48.120 But at the same time, and this goes back perhaps 0:09:48.160 --> 0:09:52.280 to my BCG background, UM, I really are our role 0:09:52.679 --> 0:09:55.000 my firm's role is to also be an advisor to 0:09:55.080 --> 0:09:58.160 them as well as to the market. So it's I'll 0:09:58.160 --> 0:10:00.320 give you two assignments we're working on today. A in 0:10:00.320 --> 0:10:05.280 the genesis of it UM each each one UM is 0:10:05.400 --> 0:10:08.240 arguably for one of the biggest and most sophisticated hedge 0:10:08.240 --> 0:10:11.520 funds in the world. One UM, I started talking with 0:10:11.559 --> 0:10:13.520 the founder at the end of the summer about a 0:10:13.520 --> 0:10:16.880 new business he wants to build. He runs a forty 0:10:16.880 --> 0:10:20.240 billion dollar hedge funds, super successful, and he wants to 0:10:20.280 --> 0:10:23.280 create something wholly other than what he does today. So 0:10:23.320 --> 0:10:27.400 we're helping him find somebody who could oversee that and 0:10:27.440 --> 0:10:31.480 build that. That's that's a very sophisticated person who's not 0:10:31.600 --> 0:10:33.920 This isn't someone looking for a job. This is somebody 0:10:33.960 --> 0:10:37.600 who has actually had great success with what they've done 0:10:37.600 --> 0:10:39.720 in the past, and this is kind of an interesting 0:10:39.760 --> 0:10:43.960 maybe chapter two UM and and as successful as they've been, 0:10:44.160 --> 0:10:47.440 it's an opportunity for even greater wealth creation. The second 0:10:47.480 --> 0:10:51.560 example I'll give you is another UM client that is 0:10:51.640 --> 0:10:54.240 almost as big UM and again, these are two of 0:10:54.240 --> 0:10:57.160 the most successful hedge funds in the world. Very forward 0:10:57.160 --> 0:11:00.720 thinking guys. Uh, this is al we've worked with for 0:11:00.760 --> 0:11:03.280 a long time. I came to him and I said 0:11:03.320 --> 0:11:06.880 to him, Um, there I see an ARB in the 0:11:06.920 --> 0:11:10.520 market right now. UM, there's a universe of people who 0:11:10.600 --> 0:11:14.560 are really talented and our staying where they are not 0:11:14.640 --> 0:11:19.480 because they're happy, but because a better option doesn't exist. 0:11:19.840 --> 0:11:22.360 And if you created this, I think you could capture 0:11:23.080 --> 0:11:25.959 that alpha right this this group of individuals that have 0:11:26.040 --> 0:11:28.800 been phenomenal P and L generators, even in the last 0:11:28.840 --> 0:11:31.800 few years where it's been very difficult, he's now building 0:11:31.800 --> 0:11:36.240 that business. So it's both UM working on UM discreet 0:11:36.280 --> 0:11:39.000 assignments for our clients as well as coming to them 0:11:39.000 --> 0:11:42.800 with advice about where to take take their how to 0:11:42.840 --> 0:11:46.439 take their funds forward. That's that's fascinating. So if someone 0:11:46.480 --> 0:11:49.920 comes to you and they're looking to fill a specific role, 0:11:50.679 --> 0:11:54.160 what is your thought process like when you're trying to say, 0:11:54.520 --> 0:11:56.480 who do I know that might be a good fit 0:11:56.559 --> 0:12:00.000 for this? Or if I don't know anybody in particul 0:12:00.040 --> 0:12:02.400 killer who comes to mind, how do you go about 0:12:03.040 --> 0:12:08.400 creating UM a pool of applicants that could fill that role. Well, 0:12:08.800 --> 0:12:13.959 after again almost two decades doing this, we typically, UM, 0:12:14.240 --> 0:12:15.719 you know most of the player We kind of No, 0:12:15.840 --> 0:12:17.280 I'm not going to go so far as to say 0:12:17.320 --> 0:12:19.600 we have the answer before we begin, although that is 0:12:19.679 --> 0:12:22.840 often correct, like actually formally begin this like someone says 0:12:22.880 --> 0:12:24.520 something and you're like, I know, in the back of 0:12:24.559 --> 0:12:27.079 your head, I have just the p We We've done 0:12:27.280 --> 0:12:33.160 so much work in every conceivable asset class so many times, 0:12:33.960 --> 0:12:38.040 um that when we start something, it's rarely truly brand 0:12:38.040 --> 0:12:40.959 new what it can be because certain strategies are more 0:12:40.960 --> 0:12:44.920 cyclical than others. So for example, UM, when we did 0:12:44.960 --> 0:12:47.079 the here's a good example, when we did the head 0:12:47.080 --> 0:12:49.400 of Emerging markets for one of our clients, he asked 0:12:49.400 --> 0:12:51.640 me how much work we've done in e M and 0:12:51.679 --> 0:12:54.000 I told him we had done a fair bit of work. 0:12:54.200 --> 0:12:56.040 This is going back a few years. But because it's 0:12:56.040 --> 0:12:59.839 a cyclical strategy, not for a while. UM, So they're 0:13:00.600 --> 0:13:03.280 what we did is we threw a lasto over the 0:13:03.400 --> 0:13:05.920 universe sort of as we knew it from when we 0:13:06.080 --> 0:13:09.040 last left off and when that strategy was last in vogue, 0:13:09.640 --> 0:13:13.360 and and it was a pretty sizeable universe. But um, 0:13:13.400 --> 0:13:15.360 and this was a global search as well, right, because 0:13:15.360 --> 0:13:17.280 it's a head of emerging markets, it's the person could 0:13:17.280 --> 0:13:19.200 sit here or could sit in London and we just 0:13:19.320 --> 0:13:22.480 dive in and we build a tapestry of who the 0:13:22.520 --> 0:13:25.960 best people are, which is both by meeting people that 0:13:26.040 --> 0:13:28.640 we already know to be good. But even if we 0:13:28.720 --> 0:13:32.280 have no idea UM, the reality is we're doing so 0:13:32.400 --> 0:13:37.800 much work in other areas, whether it's credit rates, macro, 0:13:38.520 --> 0:13:41.920 and if we're doing work at a multi strat and 0:13:42.000 --> 0:13:46.439 we have the credit candidates or the equities candidates some play, 0:13:46.480 --> 0:13:49.440 they will also have perspective on who is good in 0:13:49.480 --> 0:13:52.720 a m right, whether it's at their firm or they 0:13:52.760 --> 0:13:56.319 may or they may know someone that they respected another firm. 0:13:56.360 --> 0:13:59.360 And and the common theme is these are people we're 0:13:59.400 --> 0:14:01.560 reaching out to, people who have who we who we 0:14:01.640 --> 0:14:06.120 view as best in class and um, talented people tend 0:14:06.160 --> 0:14:10.000 to recommend other talented people, so we we very quickly 0:14:10.400 --> 0:14:12.640 um form a picture of who the best people are. 0:14:12.720 --> 0:14:15.439 And the other thing Barry is just good old fashioned 0:14:15.520 --> 0:14:18.200 hard work. When we do a search, any search, we're 0:14:18.240 --> 0:14:23.320 typically going through maybe to three people, even though I 0:14:23.400 --> 0:14:26.520 know the answer is within ten to fifteen of those. 0:14:26.560 --> 0:14:29.000 We just want to make sure we're leaving no stone 0:14:29.080 --> 0:14:32.680 unturned and also building our own depth and breadth of knowledge. 0:14:32.800 --> 0:14:36.240 So when you make a final recommendation to a firm. 0:14:37.000 --> 0:14:39.520 I imagine this varies from firm to firms. Do some 0:14:39.600 --> 0:14:42.520 firms say find me the guy and I'll hire them. 0:14:42.680 --> 0:14:44.920 Or do firms say give me your best on a 0:14:45.120 --> 0:14:49.000 three choices and will interview them. What what's the range like? 0:14:49.360 --> 0:14:52.800 It's really it's usually iterative because again there there is 0:14:53.640 --> 0:14:58.440 there's the best three choices in its basis form, which 0:14:58.480 --> 0:15:02.160 is people who are um who can generate Who are 0:15:02.160 --> 0:15:05.080 the people who can generate consistent P and l over time? 0:15:05.840 --> 0:15:10.760 UM that meet with with our UM with that meet 0:15:10.800 --> 0:15:15.680 with our investing you know our investment parameters. But your 0:15:15.840 --> 0:15:18.920 your version of who the those best three people are 0:15:19.120 --> 0:15:21.200 may be different than someone else's. Part of it is 0:15:21.240 --> 0:15:25.360 cultural fit. Part of it is just how flexible you, 0:15:25.400 --> 0:15:27.440 as a founder are going to be with respect to 0:15:27.480 --> 0:15:29.040 giving them. You may say you're going to give them 0:15:29.040 --> 0:15:31.840 a fair degree of you know, a lot of autonomy, 0:15:31.880 --> 0:15:33.920 but they may need more than what you're willing to 0:15:33.960 --> 0:15:37.520 give them. Um, they and then there were just nuances. 0:15:37.600 --> 0:15:40.600 They may You may say you're open to somebody who 0:15:40.680 --> 0:15:43.960 runs in a in a manner that's quite that's concentrated, 0:15:44.000 --> 0:15:47.320 in volatile, but their version of concentration and volatility maybe 0:15:47.320 --> 0:15:49.680 too much for you. So there's a lot of nuances 0:15:49.720 --> 0:15:52.640 where we you and I um need to iterate on 0:15:52.800 --> 0:15:55.520 truly who the best quote three are. And the way 0:15:55.560 --> 0:15:57.920 we work is I'm not gonna we're not gonna throw fifty. 0:15:58.120 --> 0:15:59.760 We're going to do the work of meeting all the 0:16:00.000 --> 0:16:02.240 bull but we're going to have you meet let's call 0:16:02.280 --> 0:16:05.680 it fifteen twenty that many, and they want you as 0:16:05.720 --> 0:16:08.480 well because we're talking about really good people and they're 0:16:08.480 --> 0:16:10.960 going to learn something. They're going to learn how other 0:16:11.000 --> 0:16:12.840 funds are set up, they're going to learn how other 0:16:13.480 --> 0:16:17.000 um how they're going to get ideas from these people 0:16:17.160 --> 0:16:20.440 right there. There may be um uh, let's say it's 0:16:20.480 --> 0:16:22.800 along short equity search. There may be things that that 0:16:22.800 --> 0:16:24.920 that the candidates are in that are actually helpful for 0:16:24.920 --> 0:16:28.120 the founder to know about. So if if I told 0:16:28.160 --> 0:16:30.880 you that a search is a portal to meeting the 0:16:30.920 --> 0:16:34.320 top fifty people in your universe, you would take every 0:16:34.320 --> 0:16:36.400 one of those meetings. That's a good use of your time. 0:16:36.440 --> 0:16:38.680 So this isn't just I need a guy to do this, 0:16:38.840 --> 0:16:42.440 get me some now, this is a whole big, holistic 0:16:42.480 --> 0:16:45.120 process that's a really a two way street with a 0:16:45.120 --> 0:16:47.480 lot of exchange of information. That is the only way 0:16:47.480 --> 0:16:50.880 we work. And it's and and I will tell you, um, 0:16:51.360 --> 0:16:53.800 we're doing a search right now where the founder was 0:16:53.840 --> 0:16:56.360 candid with me. He may not even end up hiring someone. 0:16:56.920 --> 0:17:01.480 He just sees um an opportunity that he may may 0:17:01.560 --> 0:17:05.119 being the operative word, want to capitalize upon and wants 0:17:05.160 --> 0:17:07.800 to meet the smartest people who do this out there. 0:17:07.880 --> 0:17:10.800 And then let's iterate on what makes sense. So that's 0:17:10.840 --> 0:17:13.600 not that different than BCG, where I had to sort 0:17:13.640 --> 0:17:15.960 of help a CEO draw a conclusion on whether to 0:17:16.080 --> 0:17:18.320 enter a market, and the way we went about that 0:17:18.400 --> 0:17:21.720 was through competitive benchmarking and speaking to other really smart 0:17:21.760 --> 0:17:25.080 people who sat in competitive companies and would help us 0:17:25.080 --> 0:17:27.399 to help him figure it out. So here's the obvious 0:17:27.480 --> 0:17:32.639 business question. Typically m headhunting and recruitment firms get paid 0:17:33.160 --> 0:17:36.760 when the hier is placed. If someone says to you, hey, 0:17:36.800 --> 0:17:39.200 I may may not hire this person, but do all 0:17:39.200 --> 0:17:41.280 this work, do you have to set up a different 0:17:41.359 --> 0:17:44.560 sort of consultingly. We we are retained firm. We don't 0:17:44.560 --> 0:17:48.040 do any work without without so it's a very different 0:17:48.040 --> 0:17:51.960 structure than the old school. Now we we are at 0:17:51.960 --> 0:17:54.800 the risk of being totally a modest I will tell you, 0:17:55.040 --> 0:17:57.120 for a variety of reasons, I don't think we look 0:17:57.200 --> 0:18:01.000 like anybody else that the most prominent one of which 0:18:01.320 --> 0:18:05.199 is um are the level we work at and the 0:18:05.320 --> 0:18:11.720 access to the people that we have. So um It's. Yes, 0:18:11.760 --> 0:18:14.480 there are discrete roles that founders need to fill. Yes 0:18:14.520 --> 0:18:17.919 we are hired to complete those searches, but they tend 0:18:17.960 --> 0:18:22.240 to be really important searches that will move the needle 0:18:22.320 --> 0:18:24.200 for the for the fund. And if it's a fund 0:18:24.640 --> 0:18:27.520 that's let's call it somewhere between ten and forty billion, 0:18:28.000 --> 0:18:32.240 that's a really important person. Um. And and and it's 0:18:32.280 --> 0:18:35.960 not about who's looking for a job. It's not about 0:18:36.400 --> 0:18:40.200 um uh, you know who's available. It's that's not how 0:18:40.200 --> 0:18:43.200 we come in things. If you think of a ven diagram, 0:18:43.200 --> 0:18:46.400 one bubble being best in class, and there are very 0:18:46.440 --> 0:18:48.760 few people in any asset class I'd put into that 0:18:48.800 --> 0:18:51.480 bubble that are really that good. Again, there's all the 0:18:51.520 --> 0:18:54.320 work we do to make sure we're leaving no stone unturned, 0:18:54.359 --> 0:18:57.320 but I really have a firm view on who is 0:18:57.400 --> 0:19:00.119 best in class. My firm does before we start at 0:19:00.119 --> 0:19:01.639 any sorts. That's why I say, we sort of know 0:19:01.680 --> 0:19:03.159 the answer, but we just wanted we do all the 0:19:03.160 --> 0:19:05.560 work to make sure we're not missing anybody. The second 0:19:05.640 --> 0:19:10.240 bubble is people who are disenfranchised, miserable, looking for jobs. 0:19:10.600 --> 0:19:13.800 If there's an overlap, and these days, for a variety 0:19:13.800 --> 0:19:15.840 of reasons we can get into, there's probably more of 0:19:15.880 --> 0:19:19.159 an overlap than ever before. That's a happy coincidence. It 0:19:19.160 --> 0:19:21.919 makes our job a little bit easier. All we care about. 0:19:22.080 --> 0:19:25.359 All we care about is that first bubble and really 0:19:25.400 --> 0:19:33.439 talented people who are who have accomplished something special. This 0:19:33.480 --> 0:19:36.560 would not be an unusual profile of a candidate. Somebody 0:19:36.560 --> 0:19:41.200 who oversees five billion dollars where they sit today has 0:19:41.240 --> 0:19:44.159 had triple digit p n L every year for the 0:19:44.240 --> 0:19:48.480 last specifically triple digit. Yeah, it's not even double digit. 0:19:48.880 --> 0:19:52.240 Triple digit is an actual candidate and this isn't an outlier. 0:19:52.320 --> 0:19:55.520 This is like, this is every day what we do. 0:19:55.680 --> 0:19:59.679 So five billion, triple digit p n L and the 0:19:59.760 --> 0:20:02.480 las four years have been really, really difficult. So that's 0:20:02.560 --> 0:20:05.560 quite an accomplishment, right, much much tougher environment, which we 0:20:05.560 --> 0:20:12.320 can talk about um and uh uh. And compensation for 0:20:12.400 --> 0:20:14.960 him has typically been between twenty and thirty a year. 0:20:15.359 --> 0:20:17.439 He's not looking for a job, and he's at a 0:20:17.480 --> 0:20:19.840 great firm, by the way, which is not at all 0:20:20.200 --> 0:20:23.600 facing the issues other firms are facing. He's coming in 0:20:23.640 --> 0:20:26.000 to talk to me and my team because he wants 0:20:26.000 --> 0:20:29.159 to understand given what we do, given all the smart 0:20:29.200 --> 0:20:32.119 people we meet, and the clients we have, and everything 0:20:32.160 --> 0:20:35.679 we see across the entire hedge fund landscape. Am I, 0:20:37.400 --> 0:20:42.560 what do you think about the structure of where I'm sitting? UM? 0:20:42.680 --> 0:20:46.399 What is what else exists out there? Here's what I've built? 0:20:47.040 --> 0:20:50.000 Do I take my bag of tricks and do something different? 0:20:50.040 --> 0:20:53.000 And then what does different look like? What should compensation 0:20:53.080 --> 0:20:56.400 look like? For me? It's it's it's it's an advisory 0:20:56.680 --> 0:21:00.320 UM meeting, and in that it is our job to 0:21:00.440 --> 0:21:03.760 understand everything about his firm before he walks in, which 0:21:03.760 --> 0:21:05.280 we know. Why do we know because we've met plenty 0:21:05.320 --> 0:21:09.679 of other people at that firm UM constantly and UM 0:21:09.760 --> 0:21:13.119 and also understand what all his other options look like. 0:21:13.160 --> 0:21:15.639 So we have to have deep intelligence on all the 0:21:15.640 --> 0:21:18.400 other funds that he could theoretically think about, and then 0:21:18.440 --> 0:21:21.600 have a point of view on which of our clients 0:21:21.600 --> 0:21:24.960 could make sense. And there are times there isn't although 0:21:24.960 --> 0:21:27.520 it's rare there you know there isn't something else because 0:21:27.560 --> 0:21:29.879 our clients tend to be very innovative and creative. To 0:21:29.920 --> 0:21:32.359 attract someone like that, there are times he should stay 0:21:32.359 --> 0:21:35.159 exactly where he's at, but more often than not, we 0:21:35.240 --> 0:21:38.920 can set something up that is structurally superior to where 0:21:38.960 --> 0:21:41.639 he is. Even at that level, that's a very different 0:21:41.680 --> 0:21:45.960 dynamic than somebody who like needs a job. Quite fascinating. 0:21:46.280 --> 0:21:51.159 Let's let's jump into something you alluded to earlier. The 0:21:51.200 --> 0:21:56.280 past decade has not been especially kind to most hedge funds. 0:21:56.320 --> 0:22:00.000 A lot of them have been struggling. First question, from 0:22:00.000 --> 0:22:04.040 your unique vantage point, why is that? And second what 0:22:04.080 --> 0:22:06.760 can they do to turn of things around? Okay, so 0:22:06.920 --> 0:22:10.119 I don't know that it's been the past decade. I 0:22:10.160 --> 0:22:15.440 think it's more from twenty fifteen on. Okay, Okay, so 0:22:15.600 --> 0:22:18.280 we could that's a whole longer. That's a whole longer discussion. 0:22:18.320 --> 0:22:22.159 We can talk. But it's it's been it's been a 0:22:22.359 --> 0:22:26.320 very very tough environment. But but let's talk about what's 0:22:26.320 --> 0:22:31.159 gone on. And MO went to timing, so um, and 0:22:31.280 --> 0:22:34.520 let's juxtapose it to when I started, which we talked 0:22:34.560 --> 0:22:36.879 about earlier, which was two thousand and three, that's when 0:22:36.920 --> 0:22:41.720 I started my firm, uh five hundred billion of assets 0:22:41.800 --> 0:22:44.840 under management, three thousand hedge funds. As you said, Barry, 0:22:44.920 --> 0:22:47.159 Now there's eleven thousand hedge funds and three and a 0:22:47.200 --> 0:22:50.359 half trillion of a UM. A lot of that growth 0:22:50.400 --> 0:22:54.679 actually came post crisis. At the time of the in 0:22:54.720 --> 0:22:57.320