Are successful hedge fund managers financial engineers? Does one need theoretical expertise and financial engineering skills to be a successful hedge fund manager?
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I'm pretty sure Carl Icahn or George Soros haven't had a math class since the start of the Cold War and are doing pretty well
Even the successful quant hedge funds are often (most of the time?) run by people not that knowledgeable in financial theory/engineering. Instead, they're often excellent statisticians.
Most hedge fund managers - on a percentage basis - are complete jokes. Read Hedge Fund Mirage. It's a great book about how on a net basis hedge fund managers drain value from the system. 98% of being successful in hedge fund management is having pedigree, an ability to state an investment style/thesis in a ridiculously articulate way, and looking/acting the part. On the whole, hedge fund managers do NOT add value and shouldn't be revered like they are.
Most hedge funds just on a proportional basis, whether they add value or not, are not run by financial engineers. The smart business people hire the math geeks to do that bullshit for them. Rare exceptions are Simons and David Shaw.
Define successful
bottles and models, duh. lolz
Usefulness of Financial Engineering in HF Portfolio Management? (Originally Posted: 05/10/2014)
Long time lurker and a sophomore UG finance. Figured now is the time to join the community.
To my questions: what is the usefulness of financial engineering in hf portfolio management? Is it common for hf pm's to be versed in financial engineering? Is financial engineering exclusive to quant funds?
Actually applying financial engineering techniques to portfolio construction is largely the province of quant funds, asset allocators, and automated strategies, although there are some fundamentally oriented funds that try to be more mathematical in their approach to things like position sizing, entry/exit points, and risk management...not sure with how much success in the end vs. a more qualitative approach. Fundamental investing is more art than science in my experience. Where you may find a solid grounding in financial engineering helpful anywhere is in having an understanding of the pricing models (and assumptions) other investors and the sell-side may be using for derivatives, structured products, and the like.
"Financial engineering" is also a fairly broad term - there are of course hedge funds that do exclusively things like covertible arbitrage, which might be part of your curriculum.
Hedge Funds for MFE students? (Originally Posted: 01/23/2017)
I'm in a target MFE program and I'm currently trying to go do research/quant/development. Does anyone know of a good fund that hires quants. I don't really want to be just a programmer though, and it seems like a lot of these roles just are looking for coders. Thanks
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