Peter Muller on hedge funds
From The Quant & The Creative | Wall Street Musician Pete Muller | After Arts · · After Arts
“We realized skill playing poker and the math and the research could be combined and start an internal hedge fund — we came up with this pitch to the company and later Morgan Stanley came looking and said, 'Okay, come give it a try.'”
On , Peter Muller, Founder & CEO at PDT Partners, spoke about hedge funds during The Quant & The Creative | Wall Street Musician Pete Muller | After Arts on After Arts.
About Peter Muller
Peter Muller, founder and CEO of PDT Partners, has been discussing his career and philosophy in a series of recent interviews. He described his path from studying mathematics at Princeton to working at BARRA, and then convincing Morgan Stanley in 1993 to let him start a quantitative trading desk called Process-Driven Trading (PDT). According to Muller, PDT averaged 20% annual returns for nearly two decades and was Morgan Stanley's most profitable group before spinning out in 2012. He stated that the firm's flagship fund has never had a down year since 1993. Muller attributed the firm's success to a culture of trust and collaboration, saying "we want our people to be having a great time" and that they aim to be "the best place to work in quantitative finance." He noted that the firm charges 3 and 50 (likely referring to a 3% management fee and 50% performance fee) and has a 3.5% turnover rate. Beyond finance, Muller has spoken extensively about his creative pursuits. He said he took a seven-year sabbatical from finance in 1999 after burning out, during which he traveled and eventually returned to music. He has released seven studio albums, creates crossword puzzles for the New York Times and a monthly music-based puzzle for the Washington Post, and has made the final table at the World Series of Poker. Muller described his motivation as following joy and passion, stating "the things that motivate me are joy — I like doing what I'm excited about." He advised that "if you listen to your heart, if you listen to your gut even if it's telling you something that's contrary... that's just how it's always worked for me."