Since leverage is the topic du jour: what’s the leverage like at quant shops?
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This is how sell-side guys with good struct desks make $ on swaps. Product 10x lev to hit 12% vol target != 5bps running costs, but 5bps * 10 = 50bps. Fees on gross, so netted positions over multiple products = free $ (negotiable, but many aren't aware they're paying extra)
Yep financing drag is real! Savvy quant shops will use their wallet wisely — sell side loves to have this business so leverage the spend to get access to balance sheet, repo, management meetings, allocation in blocks/seos — scarce resources that can add value
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For sure. Also being able to outsource operations, intraday trading execution, etc made the fees *almost* worth it. Though I did wrangle out some pretty incredible meetings out of these relationships (Bill Ackman, Eugene Fama, etc)
Thanks. Twitter will use this to make your timeline better. UndoUndo
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