Risk managers everywhere will be feeling encouraged by the fact that Gregg Weinstein, a former Goldman Sachs partner, is setting up his own hedge fund.
In his most recent incarnation he was global head of risk management for Goldman Sachs Asset Management. For non risk managers, this is unnerving.
“This is properly weird and spooky,” says John Godden, CEO and founder of hedge fund consultancy IGS Group. “Most hedge fund founders have been traders, sales guys, and analysts. They tend to have almost the opposite profile to a risk manager.”
“These are two very difficult skillsets,” says one hedge fund risk manager turned banking prop trader. “Simply being a good risk manager does not qualify you for being a good risk taker.”
Risk managers are really hot
Weinstein’s elevation from risk manager to hedge fund manager may not be quite so weird given that he was once head of US credit trading at Goldman, and therefore has a trading background too.
Nor is he the only risk manager to turn portfolio manager. Jean-Felix Aniel-Quiroga, a partner at Brevan Howard, is rumoured to have gone the same route.
Either way, hedge funds in London are big on risk management at the moment. Marshall Wace is rumoured to have appointed a big name risk manager who’s due to start in a few months.
“Everyone’s looking at Bluecrest and Brevan Howard. Both are known for having strong risk management; both did well during the downturn. People want to emulate that,” says one headhunter.
“All hedge funds are beefing up their compliance and risk teams as they go after institutional money,” says Barry Seath at Mirage Recruitment. Weinstein’s fund may therefore be at something of an advantage.