Wall Street Keeps Raiding Silicon Valley For Tech Talent14 March, 2016 / Articles
On Thursday, the world’s biggest hedge fund firm, Bridgewater Associates, announced that it had hired a new co-chief executive officer. With $157 billion under management, Bridgewater did not poach some big shot partner at Goldman Sachs or a chief investment officer at one of the big asset managers. Instead, billionaire Ray Dalio’s hedge fund said it had hired Jon Rubinstein, a former Apple executive best known for developing the iPod and Palm smartphones.
Bridgewater made clear to its clients that it had good reason to hire a prominent Silicon Valley player. “We needed to bring in an exceptional co-CEO with a strong tech focus to supplement the existing leadership,” Bridgewater wrote in a note to its clients. “Technology is pervasively important at Bridgewater, especially since one of our major strategic initiatives in the coming years is to continue building out the systemized decision-making that has been so successful in our investment area and to extend it to our management as well.”
At the same time that it announced the hiring of Rubinstein, Bridgewater also said that Craig Mundie, Microsoft’s former chief research and strategy officer, would become co-executive chairman of Bridgewater alongside Dalio. Previously, Bridgewater had hired David Ferrucci, who led the team at IBM that developed the Watson computer system.
Dalio’s Bridgwater, which runs a flagship macro hedge fund, is not the only big hedge fund that has been hiring prominent technologists. Two Sigma Investments is a New York quantitative trading hedge fund firm with $32 billion that was founded by computer engineer David Siegel and John Overdeck, who once worked at Amazon. Two Sigma’s Manhattan offices are crawling with computer engineers and in October 2015 the firm hired Alfred Spector as its chief technology officer. Spector had been working at Google as vice president of research and special initiatives, focusing on machine learning among other things.
Other big financial firms that have raided Silicon Valley recently include BlackRock, the world’s biggest asset manager, which hired Bill MacCartey, who was a senior research scientist at Google. For good measure, Google billionaire Eric Schmidt last year bought a 20% stake in D.E. Shaw, the $39 billion quantitative hedge fund firm.
Call it investing driven by big-data, algorithms or machine learning, but the richest financial firms on Wall Street believe there is a revolution happening in asset management. They think that the big changes that Amazon brought to retailing and Facebook brought to media are hitting the investing game and the smart firms are arming themselves with the type of talent needed to succeed.
Hedge funds trying to lure engineers are more likely to be battling big tech companies like Facebook or the newest tech start-up rather than Morgan Stanley. Hiring tech talent is not new among the elite financial firms. More than 20 years ago, billionaire James Simons hired two IBM engineers, Robert Mercer and Peter Brown, who are now both co-chief executive officers at the quantitative hedge fund firm Simons founded, Renaissance Technologies. But hiring tech talent on Wall Street has become more common and intense.