Invest Like The Best
Episode 31 Quant Hedge Funds and the Fear of Death
Invest Like The Best

Episode 31: Quant Hedge Funds and the Fear of Death

Quant Hedge Funds and the Fear of Death

Khe Hy rose to be one of the youngest MDs at Blackrock. We cover the hedge fund landscape, what investors should look for in hedge fund managers, and the four pillars that he lives by.

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The CFA Institute. The CFA Institute is the global association of investment professionals whose mission is to lead the investment profession by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society. CFA Institute serves a global community of investment professionals working to build an investment industry where investors' interests come first, financial markets function at their best, and economies grow. The Chartered Financial Analyst credential is the most respected and recognized investment management designation in the world. The views expressed in this podcast do not necessarily represent the views of the CFA Institute.

[00:00:00] – A quick summary of Khe’s career in finance

[00:01:27] – How the flow of capital works for the hedge fund business

[00:07:09] – The process of evaluating hedge funds

[00:11:02] – What do you look for when picking pickers of stocks or managers of these funds

[00:14:24] – Exploring the quant funds and what Khe looked for when deciding to invest in them

[00:18:42] – What firm or strategies intrigued Khe the most at first glance and what negative screen did he use when picking managers

[00:21:10] – The need for repeatability in this process

[00:22:40] – At what stage of this run at Black Rock did he feel most alive

[00:24:51] – What were the right things and what was wrong during this period

[00:28:45] – Khe left this world when he was 30, but we’re looking to explore the catalyst for getting out

[00:32:13] – Breaking down the difference between I vs T-shaped people

[00:36:38] – Khe’s last day at BlackRock

[00:39:36] – The family packs up and takes off for their own version of eat, pray, love, starting in Bali.

[00:42:25] – What lessons were learned on that trip

[00:46:25] – Looking at what Khe has done since this trip stemming from his newsletter

[00:48:10] – Rad Reads and why skate culture was such an influence

[00:50:40] – The power of consistency

[00:52:03] – Permission to try whatever Khe wanted

[01:00:02] – The mutually beneficial introductions (MBI’s)

[01:04:20] – Patrick shares his experience with an MBI set up by Khe

[01:05:20] – Lolita

[01:06:12] – Looking at the four pillars that Khe lives by, starting with compassion

[01:10:52] – Next up, stillness

[01:15:53] – A look at uncomfortable introspection

[01:24:22] – The last pillar “finding your bliss” or “live your truth” and how Khe figures out the right direction to follow in life

[01:29:25] – What tops the joy ranking right now for Khe

[01:32:39] – Patrick questions we should look for a return on our time investment in life

[01:37:33] – Most memorable day in Khe’s life

[01:40:00] – Kindest thing anyone has ever done for Khe

Quant Hedge Funds and the Fear of Death

Introduction

Patrick
My guest this week is Khe Hy. Khe has a very interesting two-part story. We start with Khe's career at BlackRock, where he rose to be one of the youngest MDs at the firm, specializing in quantitative hedge funds. Khe shares his perspective on how the hedge fund landscape has changed and what investors should look for in hedge fund managers in the future. The second part of the story is about Khe's attempt to understand himself. We get into fear, joy, and all that he has learned across several years of introspection and exploration. His lessons coalesce around four key pillars, compassion, stillness, what he calls uncomfortable introspection, and finding the truth. We explore what he means by each of these ideas in some detail.I'm not sure if Khe is capable of lying. He's one of the most honest people I've met for better or worse and was kind to share both his struggles and moments of clarity on investing and life. With deep questions about purpose and deep questions about how to evaluate a quant hedge fund, this was my kind of conversation. For show notes, visit investorfieldguide.com/khe. And now please enjoy my conversation with Khe Hy.

This is going to be a conversation that I think about a third or half of the way through, will really start to surprise people. But we're going to start in a comfortable world, which is that of finance and investing. If you could give a 30 second to a minute summary of your career from start to finish in finance, we'll use that as the jump-off point kind of where you are and what you did at a high level.

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