If you want to work for Goldman Sachs you won’t have to complete a numerical test. Nor will you have to achieve a first class or summa cum laude degree. Goldman doesn’t go in for any of that stuff, but were someone to conduct an IQ test in its strats group they’d unquestionably find plenty of people whose intelligence quotient far exceeds the norm.
The most important strat at Goldman Sachs has been lying low for the past few years. Now, however, he’s poked his head back into the media glare. Armen Avanessians has spoken to the Financial Times.
For those unfamiliar with the name, Avanessians was the progenitor of Goldman’s strats group. He was there at its inception as a collaborative effort between quants and technologists at J Aron. As such, Avanessians was instrumental in the development of SecDB, Goldman’s risk and pricing database. An MIT and Columbia graduate, he joined the firm way back in 1985.
These days, Avanessians is in charge of Quantitative Investment Strategies (QIS) – the quantitative investment division which is now part of Goldman Sachs Asset Management. It’s a role he’s had since 2011, and under his auspices QIS has been achieving some big things.
Having lived through several crashes, including the “quant crash” which preceded the financial crisis, Avanessians tells the FT he’s “always paranoid”, and that his team has, “a maniacal focus on what can go wrong, rather than what can go right.” This hasn’t stopped them pushing the boundaries of data analysis. The FT says QIS is using natural language processing (NLP) to analyse companies’ results calls. It’s also looking at “geographic momentum” - the notion that the performance of some companies in a region (“economic cluster”) can be indicative of the performance of others.
A partner since 1994, Avanessians is already one of the longest serving of Goldman’s upper ranks. He doesn't appear to have any intention of leaving soon. “The core idea [pre-2007] that computers can do a lot of this better than humans was right . . . I feel that we’re just at the early stages of this quant revolution, and that gets me excited,” he informs the FT.
Separately, Tim Throsby is making himself felt at Barclays. Except it’s not Throsby himself who’s the tangible presence, but his deputy - Art Mbanefo. The Wall Street Journal reports that Mbanefo has been promoted as Throsby’s “lieutenant.”
Unlike Throsby, Mbanefo isn't a new recruit from J.P. Morgan, He's worked for Barclays since he was hired from Credit Suisse in 2009, but Barclays insiders tell us he's somewhat brusque and is ruffling feathers in his role beneath Throsby. The WSJ helps explain why: Mbanefo is charged with improving the measly 6% return on equity at Barclays investment bank. To this end, he’s reportedly “squeezing” each unit's capital. Barclays’ debt bankers and traders are understandably annoyed, but there is an upside. Under Throsby the WSJ says they’re being encouraged to take more risk with the balance sheet that remains.
UBS is copying Barclays and objecting to its DOJ fine. (Financial Times)
Deutsche Bank hired a big name healthcare M&A banker from UBS in San Francisco. (Reuters)
Goldman Sachs tech M&A bankers are having such a great year that the food ran out at their recent conference. (Business Insider)
UBS's International Women's Day video struck a bum note. (Campaign Asia)
Women's brains have more neural interconnections, so the logical and intuitive sides of the brain are highly connected. This means women tend to perform particularly well at big picture and situational thinking. (Financial News)
Smarter people are happier, but only a bit. (British Psychological Society)