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Bobby Jain

lines on the record: 76
first: 2026-02-16
most recent: 2026-02-16
sittings or episodes: 1
sources: podcast

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“An investor basis understands what you're trying to do has been in this industry before and sees the prize at the end of the tunnel. The biggest barrier entry is people say, well, there's a chicken and an egg. You have to put together the scale when it comes first. The investors are putting together the scale. Actually, there's no chicken and egg. It's just a chicken. You have to build it all.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things my dad said is take the paint up front. What makes this thing relevant, whatever one wants is another viable, competitive first year hedge fund designed as such. The hard part is the normal stuff. If to put together a leadership team, thankfully I've been doing this for 30 years, so I knew those people already. The second is you have to hire a bunch of people to build this with you. Most people in the infrastructure side of the world are playing for a B. They're coming into an existing thing and they're saying, hey, go figure out how to go to the cloud from data centers. Go stack on this thing. Go tack on this thing. But build your architecture problem from the beginning. Attracted a lot of people. Then you have to attract a bunch of risk takers to say, I see the lane you're picking. I want to be the first one in the hedge fund because everyone that's ever been in a hedge fund knows that the people get there first, do better than the people that get there later. Then you have to go put together investor base.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the characteristics of the multi strategy shops is they all have scale. and it's made it difficult to enter that space. How did you think about what you needed just to get going on day one so that you could compete with the larger players?”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Firms over time have more and more employee money and less and less available to investors. People have been giving back capital on that. And I said, this is an opportunity to create from first principles a multi-strategy from scratch, which even the market leaders not necessarily did. They evolved to that over time. They did a great job. But create one from scratch. The second big trend in the world is the financialization of everything. Everything's becoming a tradable asset. The amount of people that are in the middle of that, whether it's the prop shops, the multi-strategy firms, the banks, there's not that many intermediaries for this thing. So I said, here's an opportunity I have to start one from scratch. I'm still young enough. Obviously, there's gigantic barriers to entry in this business, but I felt like Millennium was in a great place, extremely talented people. And so I said, this is a time when I can get off and do it on my own.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Market anti correlation to equities may not persist forever. Everyone's trying to figure out other ways of doing that. If you think of the investment universe as a giant 150 trillion dollars, 35, 40% of that's 50, 60 trillion dollars you need of diversifying assets, the multi-strategy industry is one of those, there are other ones. You could do infrastructure and real estate, but that's illiquid. So your liquidity budget may have been taken up. And so you have private credit, but that's pretty illiquid. You have the uncorrelated hedge fund industry, including quant, macro, multi-strategy, maybe a trillion and a half dollars. A lot of that is closed to new investors. So the investment vehicles available in any of those spectrums, especially the multi-strategy industry, not that much. The biggest trend in our business is the privatization of Alpha, where the Alphas residing on the prop shops as well as the multi-strategy firms, the multi-strategy.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“After thirty years, even my dad would say, I was ready to do this. There were so many inflection points of when I could have started hedge fund. I was always worried maybe the world doesn't need another hedge fund. One of the things that I do separately from my day job is I've sat on the board of numerous investment committees, including two Ivy League, Harvard, and Cornell. What you see is that these investment committees are designed to be 60, 65% equity beta is their main risk. Second risk is a liquidity risk. They're taking illiquid assets. They've replaced some of the equity with private equity beta, growth equity. 35% is not equities. Not equities are supposed to be uncorrelated to equities. People would have more inequities, but they can't afford the drawdown capability of the equities. So that not equities used to be bonds. They invented whole businesses around this, risk parity and all this. And then now what you started to realizing is that the bonds”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Thought it was an incredible platform. What I thought of was try to turn this platform into an operating system to build up the IP in the center of it, to further diversify, to further industrialize the investment processes. I thought what you learn in the banks, for better or worse, is how to industrialize things, how to manage people, how to manage processes, how to build IP. That's what you're trained to do. You have a shareholder that's paying a multiple on your earnings to build IP. Perhaps superimposing that with incredible discipline on risk management. One of the things that you also learn in the banking sector is we're heavily mark to market. Millennia with one notch further, marked a minute. Why did we lose money left minute? Let's see if we could do something better about that. I learned that real discipline. I also learned the diversity of ways of making money. Millennium at the time certainly was very PM focused and you could see.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was two basic choices one was go work at an existing hedge fund or go spin out the existing prop business I known Izzy for a long time I had a tremendous amount of respect for what millennium was and I thought I could be relevant there and so Izzy called me and said I think 20 years is plenty so I joined Izzy and it was an incredible runk incredible people incredible business one of the things that my dad said to me was you really don't know anything until you've done it for 20 years That always gave me a little bit of insecurity is there's more knowledge to know. I had been doing it for 23 years at the time for the opportunity to go into a business like that, to sit next to one of the legends of the industry was an opportunity that someone like me wouldn't pass out.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“The gains will take care of themselves, and some are. Let's focus on offense. The losses will wash their way out if we make enough. These are fundamental different things. Then you have actual diversification, a big difference in these models is a core satellite. A lot of these firms are effectively core satellite. It was a great PM that started a business, then learned that they could raise more money, and they started diversifying. But at the end of the day, the whole ecosystem is a lead actor and supporting actors. It's difficult to transcend that and to have all lead actors. And there's a difference there. Supporting actors are different than lead actors in a variety of ways. The multi-managed industry was the prop desks. It's not that different. The culture shock of moving from CS to millennium was not that high at all. The same thing. A lot of it was the same people as there was a transfer of people from the prop desks to the multi-strategy industry.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Against that apple. Where to view it two separate hedge funds, you'd hold capital against being long Apple and you'd have big capital against getting short apple. This is complicated as more degrees of freedom on this topic. Fundamentally, there's a capital efficiency that comes out of a properly diversified multi-sched. Secondly, there's a purchasing power topic more relevant to the investors if you're one place because you can use this common intellectual property of risk management across more different things. The model itself worked. What's interesting about the model is these firms do very different. Even the market leaders, some of these firms are talent acquirers, some are talent developers, some are based on autonomy, and some are based on collaboration. Some the production metric is a business. We have a commodities business, and some is the PM. Some take care of the losses. Make sure you focus on the losses.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“The first thing is there's a fundamental engineering that happens in a multi-strategy context. Let's say you have a strategy that's one sharp ratio and you're a single manager hedge fund. You want to make a 10% net return. You have to make a 13% gross return. You have to run all LSB equal a 13 vol to make a 13% gross return. There's more math than that, but let's just say, simply speaking, in a multi-strategy firm, if you have enough diversification, you can run as most of these multi-managers have done a five vault to make a 10% net return. If you can run a five volt to make a 10% net return, that's a different proposition. Why can you do that? Because of diversification, because the netting. If you have a business and you add one more portfolio, let's say a stat R portfolio, there's a 50-50 chance you're long Apple already. There's a 50-50 chance they're going to be short Apple already. Now you don't have to hold capital.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Credit is a lot of that lending off of an asset management balance sheet. We started doing that at Credit Suisse. People remember we gave the employees a lot of what was considered back then the toxic assets, but they were not toxic assets. They were undermarked assets. The question is, can you do things on an asset management balance sheet with pension funds, people that have longer duration assets, people that will take less duration, maybe have a lower cost of capital because they have less leverage built into it? That was what the move at Credit Series Asset Management Some of the firms have taken it one step further now, moving to work off of insurance company balance sheets. And that was a great time. But the Volk Rule kicked in in July 15th. It became difficult to do what we were talking about on a bank's balance sheet. That's when I started thinking about after 20 years of credit suise in a variety of roles, running the prop test for that whole 20 years, co-running the securities division and running.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“That vocal rule, which was announced in 2010 or so, didn't get implemented till 2015. That was a fundamental change in the banking sector. People like me, we tried to do it within the rules of the bank. We realized it wasn't going to work. So 2012, I moved to run Credit Suisse Asset Management, which was a $400 billion asset management. But the main goal was to move all the proprietary businesses into the asset management business, which we started to do in 2012. There was two things we were doing. One is bring over a lot of the proprietary trading businesses. Some of those businesses are some of the larger hedge funds in the world right now. The second thing was to see if you could change the nature of the banking. What happened in the markets is risk-taking used to be done off of the bank's balance sheet, which is not that great because you're borrowing short and you're lending long. What we were trying to do, which has happened now, and it's the advent of rising.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“The hedge fund world, that was a giant activity. When you think about the amount of capital in the banks that was there and the amount of capital needs to be replaced with the scale of these markets, so you have the prop shops, the multi-strategy hedge funds, and the private credit firms, that has moved off the bank's balance sheets. The banks are still doing some of those things, but they're doing so much more. This relations will become more symbiotic and probably better for the financial system.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Changed the nature of your strategies, we went to decimalization in the early Before that, you were market making. Now, after decimalizations, when the spreads were narrow, you became market taking. You had to take into account hedging more and risk management became much more prominent part of your risk model than it had been before. The big impact of the financial crisis was that regulators, shareholders were uncomfortable with these kind of activities residing in the banks. There's two clear industries that have moved from the banks to the private sector. One is the private credit industry is effectively taking what the banks are doing and doing that off as the manager Alan Sheeps. One is the market making industry, taking what was done at the banks and doing it in the prop shop industry.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“We were doing all the things I'm doing now in fixed income, you had commodity strategies, credit strategies, and rates of macro strategies. And in equities, you had arbitrage equities, you had fundamental equities, and you had quantitative equities. And those were the six businesses. We always had a big business in Asia because at a bank, you could leverage the entire architecture of having an Asia office. You have lots of different taxonomies. You have market making strategies and market taking strategies. And you want to balance across those things because the market making strategies tend to be reversion-ish and the market taking strategies tend to be momentum-y. You have momentum versus reversion, which is a slightly different context. You have fundamental versus arbitrage, or I call them artists versus harvesters. The harvesting business is a beautiful business, but they tend to be correlated. So you need a balance of all these businesses. And it got you to abstract the problem rather than just fixing guns.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“In 2003, we combined all the proprietary trading groups into one group called Global Proprietary Trading after Alan Howard had just started Brevan Howard. There was a catalyst point where you could have spun out the hedge fund back then. I didn't. I stayed and I ran this global proprietary business. What was happening in 0405 is the first time you had to start dealing with crowdedness. Some of these banks were risk-arb dust. We were a stat arb desk. Let's convert ARB desks. Some guys were fixed income ARB desks. And suddenly the ARB started to get crowded. The questions were, could you take the fundamental equities business and turn it into an hard business? That's what we started to do, overlay the statistical arbitrage risk management systems, or you were doing factor hedging and all that type of stuff and try to overlay that into the fundamental equities business. And that was the root of it in the industry.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Stocks versus futures, why not? Stocks versus stocks. Then, if we're doing it in the US, why aren't we doing it in Europe and Asia? We end up short amount of time. It became a several hundred million dollar business. The first three arbitrages were cake technologists and pay them like traders, which people weren't doing then. So staffing yourself from the IT department and the Quant Research Department, not necessarily the MBA classes. The second was collecting and storing data and doing things with it and cleaning it. The third is expanding the definition of data. We were doing natural language processing back in the late 90s. We were taking in the news feeds and trading things off of it. Those prop desks, especially at Credit Suisse, that's where things were happening back then. It was much bigger than the hedge fund business, especially in the arbitrage and the harvesting side until the financial crisis.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ended up going to Credit Suite's Financial Products in 1996. That was the hot derivatives place at the time for a derivatives trader, that was the ideal place to work. It was a joint venture, part of Credit Suites versus Boston. I joined the index arbitrage desk. Now you'd call it the equity basis trade, maybe Delta One, because most banks, the proprietary guys was the end of the desk of that relative group. We had one group with a special forces group effectively. The job was to trade S&P futures versus the underlying 500 stocks. Credit Suisse Financial Products was a clever place. The guy before me made $10 billion in P&L, making $40, $50 grand a day. My first year, we made $50 million in P&L. We were treating every index R basket as an option. First, we were buying 500 stocks for its futures. Then I said, why don't we buy 50 stocks for us to futures? Then instead of”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“I picked up the harvesting nature of the business is figure out how you can provide a service, how you can bride, in this case, liquidity to do different pools of capital. There's money if you can cross two different streams, in this case, single stock options and index options, there's two different types of investors. There's money in those seams. The third thing I learned was I felt the trading floor was going to die in about a minute. I said, I can't believe this is the most efficient way to trade things. I made a point to get off the trading floor as soon as I can. Turns out the trading floors lasted for a long, long time after that. And so what I realized is that things can last a lot longer than you think they can. I learned the fundamentals of trading. O'Connor was a brilliant place to work. There were a lot of clever people. A lot of people went on to do a lot of different things. O'Connor was a good place to have formative views.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Trading floor back then was the actual American stock exchange where options traded. I ended up on the floor. And the first thing is you see what an actual trade is. You're standing there on the floor. You're buying something and the person who's selling it to you is right across the way there. It makes you think, I have to figure out why I bought this and this person wants to sell it and why I'm right and they're wrong. That gets you into the core of what a trade is. It went with me for a long time because I realized trading's not a video game. There's actual buyers and sellers. That was the first thing I learned. The second thing I learned was at O'Connor, the core of the business was index options, trade rich. People want to buy index options for protection. And single stock options trade cheap because people long stocks and they sell call options against those stocks to earn a yield. There was a core architecture of the business that had an edge built into it and your job was to harvest that edge.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“O'Connor were the two back then. The interview question was what's 49 times 28? And I say 1372. They say let's play the Yankees in the World Series. What are the chances the Mets winning four? I say, why not a 16? They say you're hired. So that's how I got into trading.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“Wouldn't have heard of Goldman Sachs till I was 21, but Hunter High School had a program where you only had to take two classes of senior. So I worked at a stock brokerage firm in 1987. I was there for the crash. I learned what money management was, reading the tape, going through the quotrons, going through the annual reports. I wouldn't have said I was particularly interested in finance. I was a numbers guy growing up. I made you in political science in college. When I got to be a senior, I joined the campus recruiting. Now people are like, hey, my dream is to be an investment banker. But that wasn't the world back then. What you saw was that the highest end kids were going into finance and there was two choices. You could go down the banking route or you can go down the trading route. I remember I went to a recruiting dinner at 2.30 in the morning. They went back to work. And I said, wow. Then the O'Connor guy showed up. O'Connor was one of the original trading shops, the predecessors to the prop shops. Sasquano.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“My dad was very conservative. We weren't a borrowing family. 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. My dad used to say an Indian kid captain of the chess team, who cares? You have to be capped in the sports teams. You have to be president of your fraternity. That's where I was. That's what I did. Queens was all about do what you're going to say. Say what you're going to do. Queens logic, we used to call it. My mom was hyper intellectually curious. She read a book a week. I got my love of reading for my mom. I lived in a working class neighborhood. I learned how to integrate with a lot of other people, how to blend in, and that all carried on going forward for a long time.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“I grew up in Queens. My parents were immigrants. My dad was an engineer and a builder. My mom was an accountant. Very excited to be in America. He was in the first wave of immigrants from Asia after the 65 Immigration Act. He gave us American names. He said, we're going to be completely integrated. I didn't meet another Indian family till I was 16. He said, in America, you have to learn golf, tennis, and skiing in my neighborhood. I was the only kid that did that. Just me and my brother. I went to high school in Manhattan. I commuted an hour and 20 minutes each day from Queens. I went to Cornell. I majored in political science government. And then I went on to Wall Street.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source
“The multi strategy firms over time have more and more employee money and less and less available to investors. People have been giving back capital on that. And I said, this is an opportunity to create from first principles a multi-strategy from scratch, which even the market leaders not necessarily did. They evolved to that over time. They did a great job. But create one from scratch. The second big trend in the world is the financialization of everything. Everything's becoming a tradable asset. The amount of people that are in the middle of that, whether it's the prop shops, the multi-strategy firms, the banks, there's not that many intermediaries for this thing. So I said, here's an opportunity I have to start one from scratch. I'm still young enough. Obviously, there's gigantic barriers to entry in this business, but I felt like Millennium was in a great place, extremely talented people. And so I said, this is a time when I can get off and do it on my own.”
2026-02-16 · Capital Allocators · Bobby Jain – Multi-Strategy Hedge Fund First Principles at Jain Global (EP.487) · IDENTIFIED FROM THE TRANSCRIPT · source