YouSaid · the spoken record

Paul Zummo

lines on the record: 92
first: 2025-12-06
most recent: 2025-12-06
sittings or episodes: 1
sources: podcast

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“If you could take that one, and it's caused a lot of pain historically from time to time. I mean, if you had that knowledge and you pull that back to 1995, wow, you would be able to navigate seamlessly across the industry in a way that was much bumpier for everybody along the way.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Morgan alternative asset. Wait a minute. I mean, it was no internet, right? So back in 1995, I mean, I don't know, you know, like we knew a fraction, we knew 5% of what we knew. I mean, it's all about getting, you know, it's all about getting an edge and continuing to reinvent yourself. I think the biggest lessons learned for us, but for the industry is and what I would have taken back if I could is just the depth of understanding on financing. So in financing agreements, right, like prime broker agreements and term and triggers and all sorts of things that have caused problems over the years.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think when I was young, like how much I learned about the Ty Cobbs and DiMaggio and Ruth's and everybody, like I think if you're a baseball player, like you should know the history. If you're going to the entrance industry, like you should know The history. When I say David Askin, you know, you should know who that is, you know? So, like. Take the time to understand the history because a number of reasons. One, it gives you context. But two, like the mistakes and the opportunities often often rhyme with each other, right? So like how do you, like investing in 2020 and March 2020 turns out it looked a lot like 2018, 2008, 1998, like there were elements that are very, very similar and being a student of history helps you navigate much better in the future.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, like has a great vision on it. I would say trust your instinct, you know? So, like, it's obvious to me today why I'm doing what I'm doing. It's like this is, I don't know, I'm skeptical, I'm structured, I'm creative, I'm like curious, like it makes sense today. It didn't make sense completely at the time. But like you follow your instinct, you're like, oh, I love to do this. So I'm working on the weekend every week because like this really intrigues me and it's interesting and like, you know, I don't know. They did not pay me and I'm still doing this, right? So like I think being true to yourself and really exploring like what makes you happy, what makes you intrigued, what really makes you dive deep on things, and then continuing to lean in and continue to pursue it and learn more and more. Maybe the second part of it is just be a student of history. So whether you, so I like baseball.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. Yeah, so I mean, first, you know, and I guess it's cliche, but like the do what you love thing is so real and valuable. But I think you have to find what you love first, like when you're 20 years old, I don't know that anyone.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Listen, if you could find $20 bottles of wine and drink like $60 billion, but I'm forgetting the name, but I have a Sangiovese like that. Yeah, which I found at one of the, you know, you go to these wine tasting events, but you go around and you could taste. Could be blind, but this is like a James Suckling one. You taste all different types of wines. And then you, I don't know. For me, I take pictures of the ones I like. And then you go back. And then you look it up, and some of them are like $150, and you're like, oh, I didn't find anything. And then you see one that's like 20 bucks and you're like, oh, maybe I found the jewel.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“What do you drink? What do you like? Well, this is, I mean, I like red more than white. I like, I don't know, like a barolo. So nice tannic red.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Every time I'm searching for anything, I caught. Yeah, so unfortunately it's a little too much of K pop demon hunters. But away from work, I like wine. So it's probably some podcast or related to wine just when I'm not reading the, you know, the notes. But there's a great one called Wine with Jimmy. Which is wine with Jim. If you want to do a deep dive on wine. I literally.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Like Netflix and So, yeah. Well, so I have a five and a half year old. And so she's dominating the Netflix account. Usually it's a K-pop demon hunters. That's the number.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“What is it? Speak like Churchill and stand like Lincoln that my old boss Jamie Kramer gave to me, which is about public speaking, which is actually really good and insightful, like easy, easy read books that speak.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Their letters, their research, you know, my analyst research, and that's a very, you know, that's the vast majority. And then like Michael Semblas does great work. Love his work. Really, really good work. So I have to say that's consuming the vast majority of my time. The only thing that stands out is a book.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“When does it break? Yeah. And I mean, it's like approaching due diligence. I give an analogy of thinking about a balance sheet where people, again, behavioral biases, you know, too many people say approach it from the asset side. How much can I make? What's the story? You need to approach it from the liability side. Like what can go wrong with this manager? What can go wrong with the strategy? Where does it break? And then turn to the asset side and effectively say, am I getting compensated for that, right? And you could teach people some of that, but part of it has to be innate as well. Like you need to be innate skeptic, maybe. So any case, Joel, you know, Joel, I think, shared my skepticism for sure. He certainly taught me a lot about the business and, you know, running a business. So, yeah, you know.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“From a career standpoint, I mentioned Joel Katzman, you know, hired me to, you know, start the business with him. And yeah, he was really instrumental. I mean, one of the things I don't think we spend as much time, but like skepticism is really important. I'm a deeply skeptical person. I think it helps you navigate things. It's one of the pearls of wisdom.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“And he was the one I kind of encourage, and we actually played this game at the end of the year, which was like a stock market game, and I actually found an arbitrage and we made more money than anyone had ever made, you know. And he's like, you know, that's kind of like real life finance. You should, you know, if you interest you, you should explore. So I credit him for kind of pushing, helping push me in that direction.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, my wrestling coach, who was my economics professor, and this is when I first started getting interested in investments and started reading, you know, I don't know, some of the classic books from way back when stock trade, you know.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. I think so, two come to mind. I mean, if I go back really, you know, back to high school, and I'm forgetting his name. It's my wrestling coach.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, look, it's an industry and an asset class and a fee structure that attracts a lot of people. And many of them deserve that fee structure and many of them are great. But yeah, obviously you need to be selective.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, for sure. And interesting, like, if we would have met 25 years ago, 15 years ago, I would have said the same thing is that I'm not here to say the hedge fund industry as a whole is such a tremendous value proposition. Like that was never the thesis. You know, the thesis is more, are there 100 or 200 managers out there that are adding enormous value? Yes. And, you know, can through great due diligence, like can myself and other people find them if they spend their time and do a great job? Yes. And is that tremendously value in portfolios? Yes, you know, but it's not about the hedge fund industry as a whole and the averages are going to knock the lights out.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Industry that are deeply valuable rather than just looking at the whole thing as a whole. And we would strongly suggest that if people are just looking at the aggregate industry, The missing point that beneath that there are strategies and sub-strategies and certainly managers that are adding enormous enormous value that's being overlooked by someone who's plugging the average into an optimizer.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“It's nowhere near one, right? So, what you really have is a collection of strategies, a collection of substrategies, importantly, the characteristics of those strategies are just vastly different from each other in many cases. And the way you use them in a portfolio is vastly different. So when people think about the hedge fund industry and they're looking at like a hedge fund benchmark, which is or, you know, like 10,000 funds cobbled together, oftentimes they look at it and they're like, well, I don't know what to make of this. It has an okay return and an okay volatility with okay characteristics. Maybe I don't need it. And it's the right conclusion to the wrong answer, right? And I'm sorry, the right conclusion for the wrong question, right? And like, again, the observation is correct, but really the question is, can I look at subsets of this?”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“So, one thing I would say that's frustrating, I think a lot of people get wrong, is they look at the hedge fund industry as an asset class. And what I mean by that is if you have an asset class, then everything in an asset class should be more or less highly correlated to each other, right? It's the same thing. If you take the 10,000 or so hedge funds that are out there, the correlation, the cross-correlation, pairwise correlation is something like 0.2 or 0.25. No.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mentioned complacency a little bit just because where we are in a cycle, but maybe if it's okay, taking a different direction to say like it's more of a misnomer about the hedge fund industry, which is if that's okay, it's a little different.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“I have the stock net on my desk, you know, like it's going to be winners and losers. And it is extremely important, extremely powerful, but it's not going to lift all boats at all times. So you need to be selective and you need to size it right”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“But also, look at, you know, we were talking about dot-com, right? So, I mean, as a little bit of your model and your playbook, right? So, I mean, obviously, Amazon came out of that, but there's a lot, you know, pets.com, you know, dating myself. But, you know, and I have Metromedia.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Following Paul Judah Jones. That's right. That's right. I mean, look, is it above us? And obviously it's real. It's going to be impactful. It's going to be enormously important. It's going to reshape how we do so many, so many things for sure. Is there excess in certain areas related to it? There has to be for sure. Again, I think it comes down to risk management, first and foremost. You know, assuming you want to set up a balanced book, it comes down to risk management first and foremost. And if you don't, if you just want to play it from a thematic standpoint, again, it also comes down to risk management from a sizing standpoint. You need to size it to be able to handle the inherent volatility of it. But is it rich? Well, of course, it's rich. Is it a bubble? I'm not the best one to say, but it certainly is real. It's certainly gone to revolutionize and change our lives.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Everybody's minds. I mean, I think it really underscores a couple things. I mean, one, risk management first and foremost, right? And it certainly on Liberation Day, I think a lot of people were caught off balance in books. And then again, oftentimes kind of retrench after that, locking losses. It's not a great recipe. So like sizing positions and sizing risk across areas in which people invest are obviously always critically important. And then on DeepSeek, look, AI is extremely exciting. It creates tremendous opportunities, but going back to what we're saying about short selling before, it also creates tremendous risk. And, you know, risk of just being one-sided bet, but also risk of, again, operating on a long, short fashion and thinking about like offsetting risks and basis and sizing. Those things are critical.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Looking forward. I mean, things we worried about today is just complacency. You know, I mean, Mark, anytime you have markets going up for, you know, for a while, inevitably complacency develops in some way, shape, or form. So we're certainly being, you know, front-footed and having discussions where is that and whether it's credit or equity markets and like how do we or specific areas with hedge funds and how do we guard against that a little bit but I think some of the events last year like we're talking about you know liberation day or maybe a deep seek event and and some managers being you know god was deep”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Are we seeing across teams? I think it depends on the model. If you look at the pods, obviously some prominent ones out there, they differ materially from strategies that they pursue. They differ materially from the culture that they pursue. They just differ in the risk management approaches is different. So it really depends. There are some managers where they are benefiting from maybe cross-polyization across teams or a sent a book that's maybe drawing upon best ideas. But it's really going to differ kind of pod to pod based on the style and how they operate.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“And even merger arbitrage events done well, you know, credits done fine. So I'd say it's been a good year overall with most strategies generating strong kind of single mid single digit to high single digit return or high single digit returns and overall definitely a good year for the industry.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“But the good news is, most of the strategies actually are doing quite well, right? So if you look at across relative value, as you mentioned, quant, the multi-strip pods, convertible bond arbitrage has been good with strong issuance. Discretionary macro, as we talked about some of the themes, whether it's gold or rates themes has done well as well. You might say, okay, well, the markets are up, but it's not just beta itself. Couple people have come up with if you look at the alpha generation this year, it's about 5%, 5.5% in Longshore, which is quite healthy.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“CTAs got hurt in April where they were very, very long equities and yet Liberation Day and the market's correct a lot. So you saw a bit of a retrenchment in CTA's performance in April that got hit pretty hard. And they've been trying to like piece it together. And they have the last couple months been stronger.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd say so we look at Pivotal Path as their indices first and foremost. I think they're very, very good quality indices and I think paints a very good picture. And that's kind of what I have in mind. So like when you look at it, you'd find that most strategies and sub-strategies have done pretty well this year in the grand scheme of things. The one exception to that is CTAs, which have struggled.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“So you've seen, I mean, on gold and precious, but I mean, discretionary macro managers have many of had that bet on. It's been a very successful bet and theme given Concerns on inflation and debt levels. So you continue to see that theme in people's portfolios. Crypto is a little more interesting and specific. Some managers, again, mostly discretionary macro managers have invested in crypto, mostly Bitcoin or ETH, more from that inflationary debt standpoint. Although others have from other standpoint as well, from like a trend following standpoint on futures, people have done it a bit on statistical arbitrage side. Some people play from like a cash future standpoint, from an ARB standpoint as well. But it's still small, at least let's say the traditional hedge funds investing in crypto, it's still small. That being said, obviously you have a large number of like dedicated crypto funds.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“It's you know, for the larger hedge funds, for sure. I think it's becoming, you know, the vast majority of them are opening offices or have offices in the region. So it is definitely an area that is attracting a lot of interest. And then from an investment standpoint, again, it's a much smaller market, but I think the policy changes and regulatory changes which allow foreign ownership and derivatives markets starting is encouraging as well. It's early days. And again, it's not the breadth and depth in the market still needs to improve. But again, it's exciting from that standpoint as well.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“All the above. Maybe to tie together one other part. I mean, there's also been a lot of movement of people, of hedge funds setting up businesses in Dubai, Abu Dhabi, and people moving there with wealth. And in turn, they become potential investors in alternatives. So that's definitely a prominent story as well, the number of people that are setting up in the region or opening up offices.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Now on the list, it's certainly coming from them, but it's broader as well. I mean, it's family office money in addition to the sovereigns. And there are interesting alternatives. They're interested in hedge funds. Locally?”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“And importantly, cross shareholder relationships started to unwind, that really set the stage for increased corporate governance. So again, we've been there for three years. I think we're maybe halfway through what needs to be done. And there's still a very, very fertile opportunity set. So that's one. The other thing I would point out is just the Middle East. Now, obviously, it's not to say that there's a lot of money from an investment standpoint going into the Middle East, but I just come back from a week-long trip in the Middle East and got there maybe 18 months prior. And it's really exciting what's going on. I mean, clearly there's a lot of interest from an investment standpoint in hedge funds and alternatives in the Middle East. There's no question about it.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, what are the areas where we're most excited about for sure and have been leaning in for a few years is Japanese corporate governance? Now, interestingly, if you look at dollar flows into Japan, it's actually not, I mean, it is positive, but it's kind of modest in a grand scheme of things, which kind of shocks me, honestly. And I don't mind because we're playing events first and foremost. But you really haven't seen that many dollar flows in, which again is unusual given everyone in the world in every way, shape, or form is probably underway Japan. And it's obviously inexpensive. But most importantly, you have a material dramatic catalyst that's driving value through Japan. And yeah, we're excited about it. I mean, corporate governance has been talked about in Japan for decades. The reality is until Abe had his third arrow and which really set off a number of regulatory and policy changes.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“And also heightened volatility and heightened uncertainty is going to be positive for the vast majority of strategies, especially from an excess return alpha standpoint.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“We see rising Vall and that's going to be good from Cisco Arbitrage. It's going to be good generally for balanced stock pickers. It's going to be good for discretionary macro managers when you see deglobalization and some of the trends that come out of that, whether it's onshoring, whether you see some of the moves in gold and like that's good from a trend falling standpoint. It's good for discretionary macro managers. When you see Japan increasing rates, the US decreasing rates, that's hopeful because it's two bets discretionary macro manages to place. It's not just like everyone operating in the same way. So those things are good. I mean, generally because it gives people more of a palette to, you know, an alpha palette to which to choose from, place more bets, diversify more.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, obviously, you have a lot of different, you know, it's a lot of different strategies, a lot of different substrate. So it's very difficult to talk about the whole hedge fund industry as one thing. But when I think about excess return, all the things that you mentioned are generally good for hedge funds, right? So the rest of the world is getting worried. Like that is, again, the fuel of what drives hedge fund returns, right? So when you see”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Years you've had volatility that's generally normal or higher. Dispersion, that's really high, and rates that are accommodative as well. And excess return on alpha has resumed and looks very much like what it looked like 20 years ago versus that kind of middle alpha winter period.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, to 2010, right? The middle period, which is, I think, nine-ish or eight, nine year period, which admittedly is quite long, was one that where you saw a lot of central bank intervention, where those variables were generally depressed, you could think about 2017, realized being really low. Obviously, we had rates at zero for a chunk of that period as well. That was difficult to generate alpha, not only for hedge funds, but more broadly. And that's kind of the alpha winter. We would suggest at that period is abnormal. And even if rates go down, even if all comes down, like you're not likely to go back to a period that's so dominated by that period of central bank intervention. And most importantly, the postscript to that is for the last five-ish years, you've gone back to kind of the good old days of alpha generation, right? So last Friday.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Three different periods. The first, starting with 2000-ish, kind of a 10-year period. I forgot the exact percentage, but like a large percentage of the time, two of those three variables were at your back. They were helpful. And you saw excess return, that was very, very high. The middle period, which is the alpha winter, you had the 10th.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“And higher rates help in a number of ways, but both kind of mechanically, obviously, if you have floating rate debt, it's helpful higher rates. But also, again, we've seen this like in a period of rising inflation where rates are going higher, that's going to fuel increased volatility. So it's a little circular, right? But elevated volatility, or at least normal volatility, elevated dispersion, and rates that are greater than 2%. When you have those three elements, so even two of those three variables kind of as a tailwind rather than a headwind, alpha generation is really, really strong. So what we've done is we looked at”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“But maybe it's just taking a step back. We identify kind of three big picture variables that really drive excess return in hedge funds. So one of them is volatility. Everything else, you could be one volatile higher. That creates dislocation, sloppy trading. Opportunity. Opportunity. It's the fuel of what drives alpha, right? The second is dispersion. So equity dispersion first and foremost, but why does dispersion as well? So more winners and losers. you know, obviously if you're a stock picker, that's helpful. And the third is rates being higher than 2%.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“So, yeah, the last five years especially have been a great time for hedge funds. So let me maybe frame it. And actually we just came out with a paper called Hedge Funds in the End of the Alpha Winter. And I should do a shout out for Emmy Hodges, who did a great job on putting the piece together.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“And a lot of what has made them successful from an alpha standpoint is going to decay. So if you don't, you know, maybe it's 15, 20% is going to decay and be irrelevant each year. So you need to constantly kind of reinvent yourself.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, eventually, which is why you need to innovate. You need to, you know, so let's take machine learning learning and quant, right? Like machine learning quantum 10 years ago, like that was novel. And, you know, today it's obviously gaining a lot momentum. People understand it more. But you have to kind of continue to reinvent. Like from our perspective, need to continue to do, look after different strategies, different types of managers to find kind of high alpha. And then from a manager's standpoint, again, let's think about quant again, the managers need to reinvent themselves and refine themselves from an alpha standpoint. So like alpha's decay, yesterday is alpha's tomorrow's beta, right?”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source
“And that helps for sure. But now, like the strategy, I mean, there are some very successful people that do it on a standalone basis. Usually they do it with credit or other events, but like it's a much more difficult place to make money. It's become largely commoditized when it becomes interesting as a swarm of money that will kind of go into it.”
2025-12-06 · Masters in Business · How to Think About Alternatives with JPMorgan's Alternative Asset Management CIO Paul Zummo · IDENTIFIED FROM THE TRANSCRIPT · source