At a time of poor performance, investor clawbacks and bad publicity, hedge funds are facing yet another problem: students like 19-year-old Shyam Kalairajah.
Kalairajah, who is rounding out his first year at Cambridge University as an economics student, is an aspiring investor in hedge funds. Young, bright, motivated and pedigreed, he's also a choice candidate at a time when many millennials are opting for jobs in Silicon Valley rather than finance. So Point72, the privately run money manager founded by hedge fund titan Steve Cohen, flew him to the East Coast late in May to meet with its recruiters.
The firm was holding its maiden "sophomore summit," a gathering in its Stamford, Connecticut, headquarters of undergraduate students interested in learning about the firm's in-house trading school.
Culled from some 400 initial applicants, Kalairajah, who had stumbled upon Point72's website through Facebook, was one of 20 who was invited that day. He spent the morning in a conference room surrounded by modern art and besuited fellow students, pushing bagels and cubes of fruit around on plates and listening to executives talk about their approach to stock-picking (using data and proprietary research to become "expert pricers"); what they were looking for in new hires (curiosity, "diversity of thinking"); and what they'd encounter if they got into the firm's newly established trading school. It's auspiciously named the Academy (2,000 hours of training; looking for inefficient pricing and learning "how to fail").