Morning Coffee: How you feel about other people after 25 years at a $50bn hedge fund. Goldman's hidden agenda

eFC logo
Robert Mercer, Bob Mercer, Jim Simons, James Simons, Renaissance Technologies, RenTech, hedge funds, quant funds, quant hedge funds, Breitbart, Steve Bannon, Milo Yiannopoulos

"The Fountainhead" by Ayn Rand is one of Robert Mercer's favorite books.

Billionaire Robert Mercer, a huge financial backer of many conservative causes and a patron of the former White House adviser Steve Bannon and Breitbart News, sent a letter to investors and pension advisers revealing that he is stepping down from the board and his role as co-CEO after 25 years at $50bn quantitative hedge fund giant Renaissance Technologies, a.k.a. RenTech.

Mercer, whose involvement in conservative politics became a lightning rod for criticism during and after the presidential election, will remain active on the research side of the fund, which makes trades using complex trading algorithms, according to the New York Times.

In addition to donating to right-wing political campaigns, Mercer was a large financial backer of Cambridge Analytica, a voter-data firm that helped to propel Donald Trump to victory.

His valedictory letter reads a bit like an Ayn Rand encomium: “I believe that individuals are happiest and most fulfilled when they form their own opinions, assume responsibility for their own actions, and spend the fruits of their own labor as they see fit. I believe that a collection of individuals making their own decisions within the confines of a clear and concise set of laws that they have determined for themselves will advance society much more effectively than will a collection of experts who are confident in their knowledge of what is best for everyone else. This is why I support conservatives, who favor a smaller, less powerful government.”

Mercer tried to distance himself from polarizing figures, including white supremacist Milo Yiannopoulos and Bannon, who he supported financially, putting him in the cross-hairs of a group that has been pressuring university endowments and pension funds to pull their money from RenTech, according to Bloomberg. Mercer said that he was selling his stake in Breitbart to his daughters “for personal reasons.”

Ben Shapiro, the former editor-at-large at Breitbart who broke with the site in 2016, told Vanity Fair, “The only person who’s really damaged here is Yiannopoulos.... It’s just a P.R. maneuver to [take] pressure off his hedge-fund investors.”

A former I.B.M. coder, Mercer is at odds politically with RenTech founder Jim Simons, a prominent supporter of Democratic causes and candidates, including Hillary Clinton’s presidential campaign, whose net worth is approximately $18.5bn.

Separately, while all the focus has been on Goldman Sachs’ M&A advisory business, which has been going gangbusters, and its bond trading business, which has not been going well, the bank has plans to continue growing a less-heralded business that it believes could. That business is debt capital markets (DCM).

Business Insider.points out that Goldman has quietly doubled its DCM revenue since 2010. Goldman Sachs' debt-underwriting business has produced revenue of $2.03bn, the highest for the first three quarters of the year. The bank ranks second for financial sponsor-related loans in the U.S. for the first nine months, according to Dealogic, up from eighth. Goldman ranks fourth in U.S.-marketed DCM volumes for the first nine months, up from sixth. Not bad for a bank that was a mere bit player in primary debt issuance before the financial crisis.

Meanwhile:

Jerome Powell will come to the chairman’s job at the Federal Reserve with a wide-ranging résumé – after working in investment banking, starting at Dillon, Read & Co. in New York, he became a partner at the PE firm Carlyle Group, where he built a fortune of at least $55m but probably more than double that. (New York Times)

Allianz chief economic adviser Mohamed El-Erian is a fan of Trump’s selection. (Bloomberg)

What happens to Gary Cohn’s dream of running the Fed deferred? (Politico)

Ex-J.P. Morgan Chase wealth manager Jennifer Sharkey, the who claims she was fired in 2009 for raising red flags of fraud and money laundering about a bank client, was let go for a much simpler reason, her former boss testified. (Bloomberg)

RBC Capital Markets’ head of research differentiates his recruitment strategy from that of competitors “where every third year they go through a massive hiring streak, pay peak of market for all of their talent on one- or two-year contracts, then drop like a stone, and they have to start all over again.” (Business Insider)

Citi says synthetic CDOs may reach $100bn as the comeback in complex credit derivatives blamed for exacerbating the global financial crisis gathers momentum. (Bloomberg)

Agreeing with rival Jamie Dimon, Credit Suisse Group CEO Tidjane Thiam says that bitcoin is the “very definition of a bubble.” (Bloomberg)

As cryptocurrencies explode in popularity, employers are clamoring for workers with expertise in the emerging field. (Bloomberg)

Among IT priorities listed by banking and financial services chief information officers in a recent Gartner survey, blockchain didn’t even crack the top 10 – Wall Street CIOs are far more concerned with beefing up existing systems with analytics, cloud services and other applications. (WSJ)

A Preqin survey, which collected data from 173 firms globally across the private equity, private debt, real estate and infrastructure sectors, found that 78% of firms increased their base salaries last year, with nearly a fifth hiking wages by over 10%, and 68% of fund managers expect to hike wages further next year. (Financial News)

Bill Ackman's Pershing Square has hemorrhaged $1.6bn of assets in five months. (Business Insider)

The income fund managed by star PM Dan Ivascyn, a.k.a. the bond prince, has attracted $62bn in new cash so far this year, driving Pimco’s renaissance. (FT)

Investment strategist and conservative Republican John Maudlin argues for universal basic employment, rather than universal basic income. (MarketWatch)

Photo credit: Mgorin/GettyImages

Related articles

Close