Founding a hedge fund is not for the faint of heart, says Robert Pohly YC ’94.
“The hedge fund business is a wonderful business,” Pohly told students in a talk on February 28, 2017. “It has great margins. But it’s also an incredibly flimsy business. In 12 months, it could be gone. I don’t care who you are—you’re going to hit a rough patch. So you’re going to have to understand what you’re doing and why you’re doing it.”
Pohly is the founder and portfolio manager of Samlyn Capital, a $4.2 billion equity long/short fund, having founded the firm—which recently celebrated its 10-year anniversary—after working at Sigma, Credit Suisse, Tiger Management, and Goldman Sachs He spoke in a student forum hosted by the Yale SOM Investment Club and the International Center for Finance.
A history major at Yale, Pohly said that he is especially attuned to how current events influence the industry and expected returns. Pohly was optimistic that the recent malaise in hedge fund returns would eventually reverse, but said it is not possible to know the exact timing. “I’m a little bit cautious that it’s going to be a great stock picking environment in 2017, because a lot of the movement of individual stocks is going to be determined by what happens in Washington, which is hard to have a differentiated view on,” he said. The current administration’s plans for, say, healthcare and trade with Mexico could affect his portfolio significantly. When asked about whether he was concerned that the market would react negatively to Trump’s erratic approach to the Oval Office, he joked, “What do you think [Trump is] going to say that’s going to freak the market out that he hasn’t already said?”
In any case, Pohly is now seasoned enough to take market fluctuations and cycles in stride. “It’s usually when everyone declares the death of some investment strategy that that strategy has a new emergence,” he said.
Over the course of his career, Pohly has guided many new hires; he advised students to make the most of their summer internships. “The summer experience can be a very valuable one for an MBA,” he said. “If you get an internship, try to work on a project—something you can walk away with and say, I worked on this paper, this report, this recommendation for six weeks. Even if they don’t implement it, you have something to show.”
One student asked Pohly how important emotional intelligence is, citing a scene from the show Billions. “I like to call it street smarts,” he said. “It’s a very important part of this business. I’ve seen extremely intelligent people fail. You have to have a certain amount of intellectual intelligence, but street smarts and common sense I would take over somebody’s SAT score any day of the week.”
About the Event
Robert Pohly YC ’94, Founder and Portfolio Manager of Samlyn Capital, a $4.2 billion equity long/short fund, spoke at the Yale School of Management. The talk was sponsored by the International Center for Finance and jointly hosted with the Yale SOM Investment Club.