Stockholm (HedgeNordic) – There are few pop bands I dislike more than the “Pet Shop Boys”. One line of their lyrics to „Opportunities” I find though describes how many shops in the asset management space divide the roles among their marketing teams and portfolio management: “I’ve got the brains you’ve got the looks. Let’s make lots of money.“ While working in sales for a CTA in what must have been the third or fourth meeting with an investor pitching for a large ticket I ran out of talent. Questions were getting quite sophisticated, specific and digging deep into the core of our trading models. Out of my comfort zone, I started cantering phrases and actually said to him “that we could not reveal the secret recipe” of the trading system. His response was epic: “I don´t need to see the recipe, but I´d like to meet the cook.” That sentence, then and there, was an eye opener for me.
In our set-up, it was unthinkable that “the brain” behind our models would ever to leave his teams´ conclave to meet an investor. All too often the quanty, geeky developers are hidden away, or chose to hide away, in a sterile, high security lab-like environment and never engage with prospects, investors or even their own staff.
As cold, remote and rational the financial industry is – and all the more so when it comes to systematic trading – it is still a people’s business. And people like to, I´d argue they have a need to, engage with people. All is fine meeting the staff in the front of house, the well-dressed receptionist guiding you to the table and slick, well-spoken and trained waiter splashing out recommendations while waiving around stylish menu cards. The star, and the one diners need to praise and trust remains the chef. While yes, it is essential investors understand how the systems work and may react to given situation, how algorithms determine entry points and exits, position sizes and what have you, when it comes to man versus machine. They like to engage with Dr. Frankenstein, and not his monster.
Printing fancy high – gloss marketing brochures or making technically impressive power point presentations and having hordes of legal and compliance people fill out due diligence questionnaires is all necessary and often rather well taken care of. But bring out the cook! Let them show some passion and have them explain why they add a pinch of salt here or there. Have some faith, they can do it! And when the plate is served, the cook is the only one really knowing what went into the stew today.
