YouSaid · the spoken record

Khe Hy

lines on the record: 106
first: 2017-04-04
most recent: 2017-04-04
sittings or episodes: 1
sources: podcast

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“You start to realize that it was a lot of levered and crowded trades, and everyone had caught the trends in the right direction. But as QE came in, liquidity went away, these kind of easier trades were much harder to identify. And hedge funds love to say that higher volatility is good for them because of increased stock dispersion. But it's like a slightly higher amount. It's like VIX 15, not in excess of that. Because then your leverage starts to really become scary, your investors start to panic. So the hedge fund strategy, I believe, got more difficult because of the environment and just because of it was such a lucrative business.”
2017-04-04 · Invest Like the Best · Khe Hy – Quant Hedge Funds and the Fear of Death - [Invest Like the Best, EP.31] · IDENTIFIED FROM THE TRANSCRIPT · source
“An emperor has no clothes moment, all these assets that were supposed to be uncorrelated, highly correlated. Leverage amplifies the drawdowns. I mean, you had major hedge funds that were down 50%, 5-0. Then you try to redeem. Guess what?”
2017-04-04 · Invest Like the Best · Khe Hy – Quant Hedge Funds and the Fear of Death - [Invest Like the Best, EP.31] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. Great, great question. And it's one of the many reasons that I ended up changing careers. So I'd separate that in two paradigms. There was really, and the ones that I lived through, so from 2003 until 2015. And obviously 2008 being the marker for the two paradigms. Prior to 2008, you had a bull market in pretty much everything, leverage was cheap and it was really easy to catch a trend, catch a beta trend, catch a credit trend, lever it up, skim two and twenty off the top, and still generate net returns in excess of 10 to 15 percent. And so it was really air quotes easy and fund to funds kind of stepped in and they took one in 10 on top of the 2 and 20. Basically everyone was making money. 2008 hits and it's kind of”
2017-04-04 · Invest Like the Best · Khe Hy – Quant Hedge Funds and the Fear of Death - [Invest Like the Best, EP.31] · IDENTIFIED FROM THE TRANSCRIPT · source
“Are also smaller individuals, but really we catered to the large institutions. And then they would come to us and say, we have half a billion dollars to deploy. We would like this return target. This is what the rest of our general asset allocation looks like. Can you build us a portfolio of hedge funds? Can you go find them, diligence them, put a portfolio together that matches that risk return and liquidity profile and then monitor it for us and then in exchange we'll pay you a fee?”
2017-04-04 · Invest Like the Best · Khe Hy – Quant Hedge Funds and the Fear of Death - [Invest Like the Best, EP.31] · IDENTIFIED FROM THE TRANSCRIPT · source
“One cog in the process, and we used to take, and I say we fund the funds, used to take quite a heavy toll fee along the way. And so if you step back, hedge funds, I think there's 7,000 of them highly unregulated, no real central database, very much a relationship and access driven business. So you're a large institution, a family office, an endowment, a government. And you read about hedge funds and you hear that they're uncorrelated to other asset classes, you want to go invest in them. However, where do you go? You don't go to Morningstar. You don't go to WSJ or other sites. You really need to know the inside baseball, A of the players and B, how to do due diligence. And so as a fund of funds, we sat between these big investors. And they're large.”
2017-04-04 · Invest Like the Best · Khe Hy – Quant Hedge Funds and the Fear of Death - [Invest Like the Best, EP.31] · IDENTIFIED FROM THE TRANSCRIPT · source
“First, thank you. It's a privilege to be here with you, and I'm really excited. So a minute on Wall Street. Let's see. I started as an investment banker at a firm called Broadview and actually quit 18 months into it. Not that I couldn't cut it, but it was not the kind of way that I wanted to be living my 22-year-old life. I stumbled upon a career in fund of hedge funds and started as a research analyst and effectively did continue down that path for 12 years, so total of 14 years in finance, and I was evaluating hedge funds predominantly hedge funds that were quantitative in nature and across all different asset classes. The last eight years I was at BlackRock. I was the head of research for the New York office and was really focused on”
2017-04-04 · Invest Like the Best · Khe Hy – Quant Hedge Funds and the Fear of Death - [Invest Like the Best, EP.31] · IDENTIFIED FROM THE TRANSCRIPT · source