Last month, BAM hosted a three-day virtual summit for the firm’s Equity teams, consisting of several panel discussions and Q&A sessions on topics like proprietary research, innovation, and team management.
One of the panels featured senior portfolio managers discussing the lessons they have learned over the course of their careers. The panel was moderated by Jeff Runnfeldt, Head of Global Equities, and included:
- Matt Jacobs, Technology Portfolio Manager
- Mayank Chamadia, Macro Portfolio Manager
- Thomas Stephens, Financials Portfolio Manager
Collectively, these panelists have over 102 years of industry experience and 26 years of experience at BAM. During the discussion, they shared valuable insights and perspectives on innovation, risk-taking, collaboration, team management and more. Below are four key takeaways from the conversation:
- Assemble an elite team. Talent has long been a differential advantage for investment firms. For this reason, PMs should constantly be striving to build the best team in the world. This objective extends beyond recruitment and requires that PMs understand how to manage and retain top talent.
Effective management begins with learning how to support and motivate different team members based on their personality, work style and performance drivers. It is also important to give junior team members opportunities for development and a clear path for growth.
Perhaps most importantly, PMs must actively focus on building their teams’ confidence. Generating alpha requires risk-taking, and risk-taking demands confidence and conviction. Rather than criticize mistakes, PMs should encourage constructive dialogue with each other and their analysts about process, risk, and accountability.
- Continuously evaluate your process. Markets are ever-changing, and sustaining long-term performance requires constant innovation. While great ideas occasionally strike at random, one way to promote more consistent innovation is by regularly examining your investment process.
Setting aside time to create a quarterly or yearly ‘business plan’ gives analysts and PMs the opportunity to evaluate their own and their team’s performance, identify strengths and weaknesses and set measurable goals and KPIs to improve results. Regular team and self-assessment also creates a historical record that can be referenced later to tangibly measure progress.
If a system, tool, or idea proves to be effective, it can be scaled firm-wide to enhance efficiency and performance more broadly. Some of the most ubiquitous processes in place at BAM today were first created by individual PMs or analysts as a way to improve their own process.
- Embrace collaboration. Cultivating a strong network of resources can improve idea velocity and quality. By collaborating with team members both within and outside their coverage area, PMs and analysts gain access to vital information, which could increase their confidence in a trade and give them first-mover advantage.
It is important to remember, however, that the volume of communication will correlate directly with the value of communication. PMs and analysts should strive to forge mutually beneficial relationships, where both parties can contribute meaningfully and equally.
- See the big picture. Generating alpha, particularly in volatile markets, requires the ability to withstand ‘short-term pain.’ A profitable investment thesis can take months to play out, and sometimes short-term losses precede longer term gains.
Having solid information, a proven investment process and conviction in your ideas are critical to withstanding short-term losses. At the same time, analysts and PMs must use the risk management tools available to them to recognize when an idea is not right.
Building large, diversified P&L streams that span multiple sectors can be an effective strategy for offsetting losses and maintaining consistent returns.
MEET THE PANELISTS:
Jeff Runnfeldt (moderator) is Head of Global Equities for Balyasny Asset Management. He joined BAM in July 2018. Jeff is best known for his past role as Global Head of Equities for Citadel between 2009 and 2012. He joined Citadel in 2002 and successfully managed a financials team and portfolio throughout his 10 years at the firm. Most recently, he led the launch of Ravelin Capital in 2015 until it merged with Citadel’s Equities business two years later. Jeff’s prior experience also includes covering global equities and financials at Montgomery Asset Management, BT Alex Brown, First Security Van Kasper, and Dain Rauscher Wessels. He began his career as a Bank Examiner at the Federal Reserve Bank of San Francisco. He holds a Bachelor of Science in Finance from California State University, Bakersfield, and a Master of Science in Finance from San Francisco State University. Jeff is based in our San Francisco office.
Matt Jacobs (panelist) joined BAM in May 2007 as a Technology Portfolio Manager, in our New York office. Prior to BAM, Matt was with SAC Capital Advisors LLC as a Senior Technology Research Specialist. Prior to SAC Capital, Matt worked for J.L. Berkowitz LLP/Cramer, Berkowitz & Co as a Partner and Director of Research. Matt’s experience also includes his role as an Analyst for Thomson Financial/The Carson Group. He holds a Bachelor of Science in Quantitative Economics from Tufts University. Matt is the Co-Head of our New York office and Head of our Greenwich office.
Mayank Chamadia (panelist) is a Macro Portfolio Manager and Co-Head of our New York office. He joined BAM in 2013 after ten years with Barclays Capital where he was Managing Director of Interest Rate Options. Mayank’s experience includes roles as an Interest Rate Options Associate at Morgan Stanley and a Strategist in Interest Rate Products at Goldman Sachs. Mayank holds a Bachelor of Technology, Electrical Engineering from Indian Institute of Technology Delhi and a Master of Science in Mathematical Finance from New York University.
Thomas Stephens (panelist) is a Financials Portfolio Manager based in our New York office. He joined BAM in 2019 from Millennium where he was a Financials Portfolio Manager. Prior to his career with MLP, Thomas was a Portfolio Manager with Citadel and SAC Capital. Thomas started his career at the Federal Reserve Bank of New York where he spent almost 10 years as a bank examiner. He holds a Bachelor of Science in Finance from Manhattan College and a Master of Business Administration in Finance from the Columbia School of Business.
