As a follow-up to our earlier article on the six things you might find helpful if you aspire to work in a Moscow hedge fund, here – based on our conversation with a manager who spent seven years working for a Russian equities hedge fund – are other things he says you may need to be aware of before you enter the Moscow hedge fund scene.
1. There may be insider trading. Moscow enacted an insider trading law last February. In the past, however, he alleges that insider trading in equities was fairly common.
2. It’s probably good to assume your broker is front running you. The brokered equities market, particularly for anything but the most liquid stocks, primarily involves Russian clients and brokers. Many brokers are also working for oligarch or a mini-garchs. They will often go first.
3. Know your employer. In order to avoid making political mistakes, you need to establish who the true owner of the fund you’re working for is.
4. When you’re investing, politics can matter more than fundamentals. Company value can simply be a proxy for a battle between factions in the government and these can cause extreme changes in value: far more than your models will predict.
5. It’s quite likely that your boss will not know more than you do, but you will need to keep up appearances.
6. You are advised to insist on taking all compensation in the form of immediate cash, with no exceptions.