Friday Wrap-Up: A Hedge Fund Legend and Reflections on the Global AI Race

Transcript from https://podmenti.com/t/6e0cf02f1742d26f

Hi everyone and welcome to In Good Company.
Oh, this was not a familiar voice. I'm Marta Scar, Chief of Communication and External Relations in Norgies Bank Investment Management.
But I'm not alone. No, I'm Hare too, Nikolai Hare.
This is a new format for our Friday episode, so it's a short wrap up.
For approximately 15 minutes, where I sit down with Nikolai and we will cover the highlights of this week's episode.
We will talk about what's been happening in the fund on the markets.
And then maybe something a bit more personal at the end, Nicolai?
Yeah, I think it should be a lot of fun.
Okay, so here we go. So this week's episode featured Sir Pearl Marshall.
who co-founded Marshall Weiss in nineteen ninety seven.
And uh it's one of the largest and most successful hedge funds in the world.
If you haven't listened yet, we will talk about some of the highlights today.
But
Please go and check out the full conversation.
First, Nikolai.
Uh I wanna start with
Who is
Paul Marshall T.
Well, Paul uh is um one of the first people who started hedge fund uh hedge fund in London. He uh started in ninety seven. That was I think probably was number three.
Uh there were only uh OD who started uh prior to that, and then Editon Capital where I worked. So he was kinda one of the OGs, one of the
original gangsters, you know?
uh been very very successful grew the firm
Uh I mean it's really a an extremely uh impressive setup and you'll hair
And understand more when you listen to the podcast.
Mm, yeah.
And you also uh ran your own hedge fund, um, Oco Capital before coming here.
So uh
What does Marshall Ways and
And the firm you ran, uh, have in common.
Well, they are um Marshall Way is known for its uh what is called TOPS. It's a system where they uh where they get a lot of uh input from uh broker uh contacts and so on, but they also have fun a a deep fundamental side, and that side is very much akin to what we were doing
at AKO like deep fundamental analysis, meeting companies, doing the research.
Uh so so quite similar in style.
And talking about tops, and of course when you listen to the episode you will hear more about what that is, but that's the alpha capture system.
Like listening to that. What does it tell you about innovation?
Well, they have been very, very strong on innovation. It's a uh really data heavy company. And I think it's quite interesting. They are seven hundred people, the same amount of people as we are in the fund. They have two hundred in tech and operations, the same as we have.
Um so the same emphasis on AI, learning, feedback systems, and so on.
As we try as we strive for hair.
Mm.
He's also written a uh a book, Ten and a half lessons from experience. Have you read it?
Yes, I have. Uh it's very good. It's uh you know, it's a few years back now, but it's kind of the
everlasting uh kind of theories about how you should avoid biases, how we tend to stick to our losers.
how we settle the winners too early and all these kind of things. So
Uh a lot of common sense in a in a short and very readable book.
Mm.
I think it's quite fun actually because
Uh I
uh did my master's degree on uh you know how to invest and when when you use pattern recognition and when you use analysis.
And of course I never disclosed who I interviewed, but I did interview him for my master thesis.
And so uh, you know, our history goes way back.
Okay. But that also means that he has influenced your thinking as an investor. Of course, absolutely. I mean uh you have to learn from the best and he's one of them.
Hm.
Hm.
So what he also talked about, uh, was how firms often grow
too hubristic and t and too big.
And of course he's
Focus in on the living return year after year.
W what are your thoughts on what he said and also like thinking about the fun that you're leading today?
Yeah, no, um
Hubris and arrogance.
Leads

of asset management companies.
It's one of the most important things.
Um and it is a very humiliating industry to work in because you are wrong so often.
You know, if you get fifty three percent right, you are doing extremely well.
Uh but you have to uh not to be
uh arrogant and you should be stubborn to a degree, but you need to change your mind. And I think if you are too if you're too arrogant, you don't manage to change your mind.
And arrogance is really the worst thing in his industry. So I would say
All the really successful fund managers I meet are very, very humble people.
Hm.
With so much going on in the world, is this even more important than they used to be? I think so.
But it's a very humbling environment because I mean it's so difficult to get it right.
Hm.
Yeah.
Yeah.
Hm.
Talked about AI.
And how they used it uh in the firm.
What w what's your reaction to the kind of like the scale of the change?
No, I think uh uh I think we have it uh we share that view, uh him and I.
It's very clear. Uh they are really onto that whole wave. They are we are doing a lot of the same things.
They are creating agents. We just launched our agent factory and already after a few weeks we have
Two hundred and seventy out of seven hundred people, you know, creating agents at MBIM.
So very much the same thing. And I think what is also interesting is the way he thought about uh using internal data to really
understand the acceleration of AI investments.
Looking at the consumption of
Tokens internally in the firm.
uh he thought that that was that you could track that and potentially see some kind of turning point.
And
The turning point
Perhaps is
when the rate of growth slows, like the second derivative of growth, when that uh slows down, uh we probably should reassess
Mm-hmm.
So now it sounds that we already have moved on to to the markets and what's going on in the funds. So let's do that. But let's um start with talking about another sektor that has been influenced by AI in the last week, and that's uh moderna Merk that.
Announced the personalized cancer vaccine.
Incredible.
Uh
AI is really helping research in so many domains.
Healthcare sector is one of the most important ones. This is a real breakthrough from Moderna.
And just also putting in a little plug here that uh the CO of Moderna is coming to our investment conference.
twenty seventh of April next year. So uh that's an important one.
That's an important one. But what does it tell you about how broad the AIV really is?
Oh it's it's uh changing and impacting uh all areas, all industries, all geographies.
It's just a matter of how uh quick you are.
we speak to companies in uh in well basically all over the world and of course we're seeing a great adoption in in Asia, in China.
We're seeing uh slower adoption in Europe, and I think that's quite
That's really the concerning thing here.
You refer to the agent factory that uh is built internally uh in the fund. And that has happened in the last week. Uh actually.
Tell us a little bit more about that.
Well we have um
We have made it really, really simple for everybody to create agents. So in the past you needed to have
relatively uh advanced technical skills to make agents now is really, really easy. You basically just go into Claude and you
By you just by putting in texts.
Say, can you make an agent which will do this and that?
And there it is.
So really democratising the ability to create uh agents.
Mm.
Yeah.
And also in that interface we can follow up uh how much credits and token are used and uh so that's also a bit of that focus. Um but uh another thing about AI that um that you talked about in the podcast was uh was hiring.
And how it's kinda like re sh shaping how you think about hiring.
Tell the listeners what you've done here in uh the fund. How is it reshaping hiring. Um
in that we are uh putting all the people we hire through AI tests, and it's not like a simple test, but you really need to understand code and
Uh it's more technical than just being able to kind of pr uh
you know, put in commands in claw. It's uh
It's a way to uh screen for people who are really keen on using this as a tool.
get more um you know AI able and agile people on board.
I am also involved personally in recruitment of the graduates, so I've just today uh interviewed uh twelve
potential candidates for a graduate programme. I th I love that.
It's makes me so optimistic when I speak to all these brilliant young people.
So uh it's good.
That's the fun, right? Yeah.
Okay.
I have a graph uh in there front of me.
Yeah.
It basically shown the combined value of the new companies that had been listed at the stock exchange in the US.
What does uh t talk us through this craft of what it should be. This is the this is the year of IPOs. We have uh huge IPOs coming. We had uh
you know, SpaceX uh earlier in the year, just before the summer, and we now have potentially
And Tropic, we have OpenAI, we have a lot of other companies coming.
Ditto in in Asia. Uh a lot of uh new introductions. And so this is uh
This is really fascinating. It does amplify what we have seen already, that there is this huge concentration of companies
On the stock exchange and uh it's interesting, and uh the top ten companies account for twenty five percent of the value of the fund.
In the past, when you had top ten companies
Accounting for a big proportion.
Then you had like one bank, one mining company, one retailer, uh, and so on. Now they're all tied into
all tied into AI, which changes the the risk profile.
Yeah.
Mm. Yeah, and uh uh most of these co companies that are coming in have
some sort of relation to to AI or
Or tech. So it's really driving up the
Love all your hair.
Yeah.
Moving on to uh a bit more
Personal side.
Yeah.
Because
Um
Paul, he talks about stress.
And he claims that he
handslits remarkably well.
And how he talks about it. I believe him.
How do you handle the stress?
Well, first of all I think it uh it helps to get a bit older because you've seen many things before.
So uh
you know that uh you get more use to volatility and you can kind of use it as your friend.
when things sell off, ideally you wanna you wanna add to to those positions.
I think it's important to find your
charging stations, you know, so the when the weekend comes you basically
know how to relax, you know what gives you energy, and that could be many things.
For me it's being out in the forest or uh you know out on out sailing or
You know?
Mushroom foraging or whatever.
Um, but it's it's very important to identify what it is.
Hm.
Yeah.
Okay, so I was picking mushroom is a sh shoting station for you. Yeah. Yeah.
And also
You like to
Take over wherever the wind blows.
Absolutely. I um
I do love sailing and I gather you uh have started sailing too.
Well yeah, uh we bought uh
sailboat two uh years ago with absolutely
No.
skills, so that has been a true uh learning journey.
Uh but it but I agree with you. It's really nice to be out in nature and and charge in that way.
But also to learn something.
As an adult, and I know you're really into
Learning.
Like how important is it to learn new things?
I think that's totally key. Uh and what we see actually here in the fun that there is that is huge.
desire to learn. I think everybody's trying to learn. That's why people think it's fun with with AI.
I think the person who knows the most when he or she dies has won.
I know it's not about accumulating wealth, it's accumulating knowledge.
Mm-hmm.

Okay. Thank you, Nicolai. And
In the next episode.
Actually plan.
For a bit of a boomerang.
Because you always ask all your guests about
Their biggest failure.
So I will ask you.
So now we can prepare.
All right. I will do.

Okay.
Thank you.
and happy weekend.