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A risk manager is setting up his own hedge fund; this is not normal

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.

Gregg (not to be confused with Boaz) had been a Goldman partner since 2002.

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.

Comments (13)

  1. Sarah,

    Interesting story, I think the comment about Jean-Felix is likley to be true if you look at his Linkedin Profile. As for the “Big name risk manager” at Marshall Wace, how do you define big name??

  2. What is the point of this article. The guy clearly has TRADING experience, just because he is a RISK MANAGER now doesn’t mean anything. Now if the article was about a pure RM with no Front Office experience setting up a hedge fund then the case would be totally different!

  3. If you can understand the odds at the casino then surely you can also play roulette!

  4. Anyone who knows about trading would realise that risk management is more important than just about anything else. If you can manage risk well you can trade just about anything. You can be the best trader/analyst in the world but if you don’t manage the risk, sooner or later you will blow up…

  5. Hmph…

    “… a former Goldman Sachs partner, is setting up his own hedge fund.”

    So….. exactly *where* is the news in this, eh…?
    I seem to recall that quite a few GS partners set up their own hedge funds. Each and every year, it seems.

    The headline should really be the first line of the article, but then it wouldn’t be news…

  6. Look for the “big name” to fall within 6 months! Everyone is betting on it. That hire is a true testimony to MW lack of knowledge in Risk Management. These guys still think RM is only for operational due diligences from clients. They had 3 CROs in 2 years… They don’t have a clue abt RM.

    A true risk manager Reply
  7. I wonder if the true risk management is really being done by the traders at these hedge funds, with the public’s assumption that the risk managers were ones overseeing the risk of the fund. That they have risk managers at allmay be for pure window dressing for clients. Does anyone know any traders (bank or fund) who truly wanted a risk manager hanging around and bothering them? They are just gum on their shoes.

  8. sarah ,i have always read your messages ,well thanks but you sweem not to understand who i am .Am apost graduate student at makerere university kampala persuing a course in economics .my only request was assistance as far as my research is concerned .

  9. this is no news for me either. I have just gone the other way. Got tired of front office sales and want to manage risk for my company. Had previous compliance experience so what is the biggy?

  10. What a dumb article.. how arrogant and conceited are these writers. a) Sarah, you have neither managed risk or traded b) clearly you will never make it as an office clerk in GS leave alone partner.. and c) do you ACTUALLY know what a risk manager does? clearly your views on “This is not normal” reveals every bit of ignorance.. I believe some local school kids are touring our trading floor, you should join a learn a thing or two

  11. Give Sarah a break.

  12. way to go ! Risk Managers should now be directly responsible for mismanaging risks.

  13. Thank God! Somneoe with brains speaks!

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