Jamie McDonald: [00:00:05] Hello everyone, and welcome to another episode of Hedge Fund Huddle with me, Jamie McDonald. Now, before we get started, I wanted to say thank you listeners for your growing and continued support. I'm thrilled to announce that we won yet another award, a Gramercy Institute 2025 Financial Content Market Award. So, I think we can now officially say that we are multi-award winning. And if the producers are listening, maybe that gives us the green light to start selling some merch, but we'll look into that. Okay, enough humble bragging. Today we are very lucky to have on the show Jaimi Goodfriend, who is Head of Development at Point72 and Head of the Point72 Academy, which is what we're going to be talking about today. So, Jaimi, welcome to the show.
Jaimi Goodfriend: [00:00:52] Thanks for having me. Appreciate it. And congratulations on your multiple awards.
Jamie McDonald: [00:00:57] Thank you very much. Yeah. We tried to squeeze in the odd award celebration when we can. So, Jaimi, right off the bat, I wanted to just make a distinction about the different programs that you have, because I know that you have the summer internship program. There is a full program for upcoming graduates, and there's one for more experienced professionals. So, I thought maybe, could you just walk us through the distinction of the difference between those programs? And I think which ones are offered in the UK and which in the US?
Jaimi Goodfriend: [00:01:25] Sure. Well, first, again, thanks for having me today and it's a pleasure to be here and honour to be here. We do have multiple intake opportunities, depending on really where a person is in their career and in their college career even. So for those who are still in school and exploring what opportunities they might have interest in after graduation, we offer an internship program during really the penultimate year summer, so they have a chance to have a miniature version of our experience, can see what it's like to really have life on the desk for us, working with a team in a shortened, condensed time frame over the summer so that they can make the best decisions that they can, before they graduate. On whether or not this is a career that they want to explore full time. I always think about this because the choices employers come to students now, earlier and earlier, even since I started in this part of my career, gosh, now more than 15 years ago. And so we think it makes sense to offer people a chance to kind of dive in to see what it's really like to be an analyst at our firm, to educate people, to make the best decisions possible. Since all this information is coming earlier and earlier to them in their college careers. But we don't stop there because…. Yes. So, for example, if you are a graduate just fresh out of college, we offer opportunities full time for those who just graduated college. But even if you started down a different path and have been in a different career, and it could be in finance or it could be outside of finance, we offer the opportunity to come in as an experienced academy hire. In other words, you've had some relevant work experience or importantly, not relevant work experience. But we can still pivot your career to towards being an investor upon graduation. And so, we do offer all three of these opportunities in the UK and beyond. So, we're excited to have applications from people no matter where they are in their career journey.
Jamie McDonald: [00:03:27] So I wanted to before we dive in, just get a little bit more of a background about yourself. You said you've been in this world for a long time. I think you're an analyst yourself. You've been a university lecturer. Can you just give us a quick background about yourself?
Jaimi Goodfriend: [00:03:38] Yeah, sure. So, I started in banking, potentially, as some of your listeners may have as well. I did mergers and acquisitions fresh out of college. I was not a business major. So, for me there was a big learning curve getting up to speed to learn how to do that analyst role. And I went from there to the typical period of time when people are junior analysts, I went from there to the sell side back then. Way back then, it was not it was not typical that people would go directly to the sell side from banking. Sometimes you had to go back and get your MBA or your masters first. But for me, I was able to secure a position at a firm to do sell side research directly after banking. And then I went to graduate school to then pivot to the buy side. And so I went to the buy side. I worked at a couple of our competitors, but ultimately, I've always wanted to be a teacher and my calling, I think, in life. And it took me ten years to be honest with myself about that. And I think that's, if I could give advice to, I guess, to people, don't wait ten years if you don't have to. But on the other hand, I learned a lot so that I could then teach something back. And so, ten years later, I became a university professor at a couple of universities, built programs at those universities to help bring people who didn't necessarily have easy access to US Wall Street to Wall Street. And I loved doing that. And then I was given the opportunity to build that at this firm. And so, I joined Point72 full time in 2015 to launch the Point72 Academy.
Jamie McDonald: [00:05:08] So let's talk about the building of the Academy back in 2015. I like to use sports analogies every now and again, so apologies in advance for that. But I'm kind of a kid of the 90s in the UK, and most notably it was Manchester United who had this YTS scheme. And I think really what came to them was it's very expensive to buy stars from other clubs, and what's better is to bring them up when you see young potential. So, what was the real initial idea? Was it more sort of we see so much young potential. We want to bring people on board earlier or, hiring portfolio managers from other firms is very expensive. Why don't we just like sort of grow our own. Explain a little bit about the thinking behind it.
Jaimi Goodfriend: [00:05:50] I think ultimately, we look back today it's not an either or situation. We get to do both because of what we've built. We both grow our talent, and we hire talent laterally. And it comes from the fact that there's this big war on talent in the industry. Hedge funds are assets and people, and we are blessed with the situation where we don't have an asset issue, but we the world, in our space has a talent problem. And so being able to tap into an organic pipeline while also being attracted to experienced hires, I think gives us an advantage. And we've been at this now, the Academy program, as you mentioned, we've been at it a while, ten years this year, which I'm super excited about and feel really lucky to be a part of, you know, the whole time. And so, we benefit from the experience and the track record, but we don't have to solely rely on it, like you said. And so, we try to be opportunistic about both approaches. When you hire an experienced person, you pay for past performance. You know that that's just but it's not necessarily an indication of what they're going to do in the future. And so, with home-grown talent, we get to know who they are, what they're capable of, and we can make more informed decisions about what's best for the firm with that talent. I always think Steve's like an intellectually curious and restless person. He never rests on his laurels. And so, I think the mentality, that mentality flows through our entire culture. And so, if you're not trying to develop your next great talent, you're falling behind. And that's probably what really drove the investment that we've made in this program.
Jamie McDonald: [00:07:24] I was listening to your Academy podcast, I should say to listeners that it's really a good listen, because, I mean, Steve gets interviewed himself and there's a moment where he says, you know, I like to climb to the top of the mountain, and when I get there, I realise there's nothing there. I'm looking for the next mountain. And I think that was a good insight into to how he thinks. He's always looking for the next big thing. And congratulations on the Academy.
Jaimi: [00:07:47] Thank you.
Jamie McDonald: [00:07:48] So I wanted to ask a kind of the million dollar question, because there'll be people listening who think, well, does my degree or what I'm studying matter to try and get into the academy? Like I like finance, but I'm doing something in a different area. So, Jaimi, to you, like, you know, what do you look for? What are the qualities do you look for? Is there a is a does a business major help or does it not help? Can you give us a little insight?
Jaimi Goodfriend: [00:08:10] Yeah. About half the people we hire come from business backgrounds. I think it's really important for listeners to know that we are not, I don't focus on the type of degree that you have. I care far more about what I call the unteachable qualities. Your critical thinking skills, your work ethic, ethical behaviour, are you commercial? And these things can be applied to any degree. I love hiring history majors, computer science majors, music majors, psychology, neuroscience. I myself was not a business major. So, I think that really helped me actually understand why it was possible and how it would be possible to bridge people who really have no experience whatsoever in finance to become great investors at our firm. I do think that passion for the markets, though, is important because with that comes a drive and determination to learn and make that bridge happen for yourself.
Jamie McDonald: [00:09:10] Yeah. For those listening, you probably would know that I worked at Point72 my myself and it was a fantastic place to work and I but I really did see the people who succeeded just really loved what they did. And I think just I mean, obviously that goes for any profession, but a real passion for markets and fascination with business and what makes good companies work was really integral to watching people succeed there. So, a question about the process and about you attracting talent. Back in the day when I was at university, we had this thing called the milk round in England, where the big companies, the UBS, Goldman Sachs mainly sell side firms would come round to the universities like Oxford and Cambridge and look for new talent. So, do you actively go to universities looking to recruit, or is it more of a passive thing where the applications are online and anyone's willing to apply?
Jaimi Goodfriend: [00:10:02] Yes, and it's all true. We both go to universities, and we source from over 75 universities in the world.
Jamie McDonald: [00:10:08] Wow.
Jaimi Goodfriend: [00:10:10] No, we can't go to that many universities. We’re a small team you know, we try to be lean, and we try to be thoughtful about how to deploy resource. But we have on campus events, and I've heard of milk rounds myself. It's not what we call it in the US, but I'm like, oh, you know, that's a cool term.
Jamie McDonald: [00:10:28] I don't even know why it's called the milk round actually. I should look that up.
Jaimi Goodfriend: [00:10:31] I asked somebody once. I thought it was like, we call them coffee chats in the US. I assume it's similar, but in addition to that, we also have online experiences, webinars. We have insight weeks. We invite people to our offices to engage in experiences. And we do host that in the UK annually for students. We offer case competitions. So, all of that is available in the region. And again, it's really with the intent of providing education and experience to students and beyond, because I think the information now is just so abundant and so coming at students so fast. And, and I think it's our responsibility to be educators of what our opportunity is so people can make the most informed decisions at an earlier and earlier time in their careers.
Jamie McDonald: [00:11:18] Oh, look, the producers just sent me a note. Home milk delivery is a long standing practice in Great Britain, which I can attest to in the mid-1960s, when companies began touring universities to promote and advertise their job opportunities directly to candidates the visits became known informally as the milk round. So, there you go.
Jaimi Goodfriend: [00:11:38] Thank you.
Jamie McDonald: [00:11:40] So, so moving on from the process. So, once you are lucky, if you're lucky enough to get a place, you know on the academy, can you talk us a little bit about what the daily routines like? What can somebody expect?
Jaimi Goodfriend: [00:11:52] Well, in the internship program, we start with a one week experience of general onboard training, what have you. I think that's everything from how your key card works to building your first financial model. And I think it just sort of helps you with the next several weeks, which is working on a team with an individual project deliverable that is used on this team. We believe in efficiency, but we also believe in doing things with intention. So, the teams have projects that that are meaningful to them that interns get to engage with, get to be mentored by analysts and portfolio managers on their team.
Jamie McDonald: [00:12:29] In terms of learning the tools that you need to be an analyst and a portfolio manager who's doing the teaching, Is it the PM and incumbent analysts where you go to, or do you have third party people like yourself who come in and train people how to model?
Jaimi Goodfriend: [00:12:43] Yeah. So, it's my team. So, we do, the investment professional development team, the academy team. We are all, and I think this is actually common, and you know this having worked at Point72, we're all practitioners, former practitioners. And so, for us, it's really teaching what we already have learned to help onboard them. I am familiar with third party companies that that teach modelling. I think that's terrific and a great experience for people. Highly recommend it. For our firm, we want something a little bit different. And so, we built it ourselves. And so the initial trainings all come from things that are proprietary to the academy. And then when people are on teams, of course, there's on ongoing learning. You know, ultimately this is an apprenticeship business. And so, I think it's incumbent upon everybody. And as I said before, culturally it's incumbent upon everybody to be teaching the next generation. But certainly, that starts with us. And it's something that we built in-house.
Jamie McDonald: [00:13:34] So I was going to ask a little bit about the transition from analyst to portfolio manager. I know we're going a little bit beyond the academy here, but so if you are at the academy, you get hired as an analyst. What's then the projected career path to becoming a portfolio manager? Do you slowly get given more responsibility. I mean, when I was there, that's kind of the way it worked. I was an analyst for a few years. But if you could explain a little bit about that, I think people would find it interesting.
Jaimi Goodfriend: [00:14:00] It's nice that some things have stayed the same. Right. But I think it's I think that part is true in that being at a hedge fund, unlike other financial positions or other types of industry positions, it's a fairly flat structure. And so, there's not a lot of promotions and titles here. You know, it's about gaining responsibility and accountability. And so, in the beginning you might work on opportunities, investments, company coverage, as we call it, with a portfolio manager with a more seasoned senior analyst on a team. But over time you'd be, even as a younger person responsible for decision making. And I always say that's something that people really need to think about. Having accountability for decision making at a younger age is a blessing and a and a burden. And it's not for everybody. And I think that for us it's about covering names, covering, maybe up to a certain number of names and getting deeper in those names. It's not about how many names can I cover. These days it's quite different, particularly with the proliferation of data where you need to know so much more. So much more information is available on something. Becoming a domain expert when there's more information available means maybe knowing a few less names but knowing them more deeply than other people.
Jamie McDonald: [00:15:16] And about the programming itself. I mean, you talk just then about the fast changing the dynamic nature of markets, I guess.
Jaimi Goodfriend: [00:15:24] Yeah.
Jamie McDonald: [00:15:25] Because, back in the day, it was really fundamental analysis. That's really what we focussed on. But now it's geopolitics, algorithms, AI, crypto. I mean, how are you bringing those topics into the programming?
Jaimi Goodfriend: [00:15:36] Sure. I mean, at the end of the day, it's still fundamental analysis. And I think the question becomes what's incorporated into the comprehension of a company and a business. And to your point, a lot more than ever, (a) because it's available, the information is available, and (b), because the world seems to be changing really fast. The best example that I think relevant to, to all of us thinking about the future is AI, right? And thinking about what is AI going to do to a lot of things, but to the analyst role. And this is something that we've already started to think about a lot from the moment that we kind of learned that, what is this and what is it going to do? My team and I, we immediately started thinking about what are we going to train, what are the tools we're going to make available to analysts, and how is how are the processes going to be different? And this is something that we really have leaned into and think it's important that we leave nobody behind in the sense that this is a real secular, permanent change in how everything behaves. But we have spent a lot of time meaningfully changing our curriculum so that people are incorporating the tools of the future today and make themselves relevant for their careers. Knowing that when you and I were in this business doing the investing roles, none of this existed, right? And we would be we'd be in trouble, right? So, you have to stay on top of, I think, things that have changed. You know, the simplest example I always, I always bring up is credit card data years ago was innovative and different and, you know, cutting edge and leading edge. And today, if you're not familiar with what's going on in the credit card data on many of these companies, you're kind of missing consensus. Well, AI is going to be the same, right? And so, you have to make sure that you are meaningfully teaching people not just what the tools are, but how to use them and, and how to innovate with them. And so, I'm really excited to see what the analyst role is going to be in the future. And my team and I think all the time about the changes we need to make in our education system here so that analysts are the best with what's available.
Jamie McDonald: [00:17:49] Jaimi, I wanted to ask a little bit about how open Point72 is being about how things work in its culture because, congratulations. All this. One of the reasons this podcast exists is because for so many years, hedge funds were these closed, mysterious, opaque organisations where people didn't realise what was going on. But you've done a really nice job of opening up about what a day in the life is like, what sort of people you attract. So, can you talk a little bit about the culture, about what a day in the life at Point72 looks like, that sort of thing?
Jaimi Goodfriend: [00:18:22] Again, I think the culture comes, this is an apprenticeship culture. And, from the days when, when you were, you were here and the days I was an analyst all the way through, certainly through today. And I think probably more than ever, it seems to me like, these days when I meet people who are young in their careers and coming through the academy, mentorship is more important than ever. And that is something mentorship circles is actually something that we have throughout the entire firm. It's not limited to the academy. We are a firm of thousands. The academy employs 40 to 50 people a year. So that's just a small fraction a year. It does may now make up a quarter of the investment population over ten years because our retention rate is so high. But beyond just that part of the business, mentorship is something that the firm believes in. Again, from the top down that comes from Steve. And so accordingly, and even before I got here, I always told people when I was building the academy that I worked on at the university before I came here, I always said, I'm not looking for anything from anybody. I've been blessed in my career and I'm very lucky to, to be here. All I ask is that you pick up the phone the next time the next generation calls you. And it's something that I still ask of anybody who comes through a program like ours. Or even if you come through a firm like ours, whether you came through the Academy or not, I think it's important to always pick up the phone for the next generation and help them, regardless of where they came from, if they're asking for your time. And setso culturally, I think that is important here. And I think it's important throughout the entire firm. I would not just put that on the academy. In terms of the daily activities that just to pivot a little bit, I would say no two days are the same just because the market. I mean, can you remember a time in history that two market days were the same?
Jamie McDonald: [00:20:05] I mean, what I actually really enjoyed is, is on your website, I can't remember the name of the person who does a does a day in the life. And get in at 7 or 730 and it's like digest the news, like how are the markets going to react to this? And I love that because as you say, like, be prepared for anything. I used to deal with insurance stocks. So, it was always any kind of global event could have repercussions. So it was that moment of getting in and then trying to work out every day was a puzzle. It's like, let's try and work out what the stocks are going to do.
Jaimi Goodfriend: [00:20:37] Well, I like what you just said there because I think what is a constant are the habits and the processes and the frameworks that you bring every day. So, although to your point, you don't know what's going to you know, insurance hasn't you know, that's amazing because, you kind of wait for the next disaster, which is terrible. It's awful. But at the same time, you're bringing the consistent framework every day. You wake up, you digest the news, you ask yourself the questions, you communicate in the same process. Your models are all built the same, perhaps. And so, in the world of the chaos, you try to create some consistency. And that comes through habit formation of good process. And that's a lot of what we teach, from the Academy through the other coaches, I run coaching programs throughout the entire analyst population to the most senior analysts at the firm. And we work on those habits and the continual formation, reaffirmation, whether it's a person sort of covering a new name for the first time or managing a new person for the first time. What are the habits that help create consistency in the chaos? And that helps, I think, to scale yourself, it helps to scale when things are idiosyncratic, as they certainly would have been, I guess, in your coverage. And so, I think you raise an excellent point that what we can do with consistency is what we practice.
Jamie McDonald: [00:21:59] I wanted to talk a little bit about numbers. So, people listening have an idea of how many people you take. How many graduates you have, what percentage of people get taken on as hires? Could you talk a little bit about that since I think it's 160 graduates since 2015.
Jaimi Goodfriend: [00:22:14] Actually, I think we're over well over 200 at this point.
Jamie McDonald: [00:22:17] Oh, okay. Sorry.
Jaimi Goodfriend: [00:22:18] No, I it's something I'm happy to correct because I'm so excited about it. We're well over 200 at this point. Around the world. We have a high retention. Well over half of them are still with us in terms of how many we hire or academy versus external hires or what have you. We don't I don't we don't believe in targets. We don't we don't have a specific percentage target. We just want to find the best talent. And we already talked about just some of the traits that we look for, regardless of background or experience level or what have you. The academies gives us a great pipeline and hopefully the results speak for themselves. I'm really excited about, we've definitely now have academy graduates who have discretion at the firm and outside the firm if they've left. And so that's my reward and that's what I'm most proud of. But even our lateral hires benefit from the training and development programs that we have now. And so, we try to evolve people at every stage of their career and believe in long term development. And so, wherever the best talent comes from, the Academy has to compete with external. And we're happy to learn from when the Academy doesn't beat out an external hire. I think that's important because we're always looking to get better. I'm really proud of the success we've had, but I would say that I'm trying to always be a student of how we can train people better for tomorrow.
Jamie McDonald: [00:23:35] And Jaimi, a question about strategies, obviously. Point72, one of the if not the most famous long short equity kind of pod shop in the world and been hugely successful for so many years. What about moving into other strategies? Is there any talk internally about that? Crypto, more fixed income world?
Jaimi Goodfriend: [00:23:54] Well, the firm does have other strategies. We just launched you know, a [MS1] new private credit area. We do trade fixed income. We have a big macro strategy. We have a big algorithmic area within the firm. And by the way, there is a Cubist academy for those who are interested in the systematic side. I don't oversee that piece of the business, but we definitely have expanded to other areas of the firm, and the firm has expanded to other strategies in the world. I still continue to focus on long short in the academy here as our bread and butter. The firm has definitely moved beyond long short.
Jamie McDonald: [00:24:30] And I left this world about ten years ago, quite a while ago because I found it then I thought, this is getting hard. I mean, it was getting really hard to make money. Do you think it's getting harder? Is that the information is too much? It's happening too fast.
Jaimi Goodfriend: [00:24:45] I think it's definitely harder than it used to be. Gosh, I left the investing world longer than that. You made it much longer than I did. So, congratulations to you. I guess what I can say is that I feel very lucky, fortunate, lucky, fortunate that we've been able to bring in former risk takers to then pivot to our coaching seats. And the firm is well endowed with resource to try to make sense of an ever increasing data world. And so, I think you have to match the pace and the changes that that have happened in the world with the tools and resources that you can make available and the training of those tools and resources. It's one thing to throw resources at somebody. That's another thing to teach them how to use them to help with their productivity, efficiency, interpretation of information. At the end of the day, I think it's a question of just turning up the volume on pace and probably on the volume on volume of information. So, speed and access to information. And what we've tried to do is say, what can we do to help with ultimately the productivity in light of that, whether it's efficiency improvements, automation improvements, training improvements. And so, yeah, better them than me to have to do this job. I think it's so hard. I always said like, we built a program that I could never get into, but it's a hats off to the, to the teachers that we have, the coaches that we have, it's a terrific group. We've all been together a long time and everyone who's in this role has done this job. And so, I think that's an important distinction. It's we only hire I only hire people who have this kind of experience to help teach the next generation.
Jamie McDonald: [00:26:26] So we're kind of running a little bit out of time. So just a few more questions and thank you for everything so far. I remember reading once that you can learn as much by trading a future as you can, by reading a whole set of books on the stock market. So, what advice do you give people? Maybe there's some young people listening now who really want to get into this world. Should they have a little dummy portfolio themselves just to have fun with it? Or are there certain books that you really think people should be reading or, just read the Wall Street Journal every day and see if it fascinates you? What kind of things would you recommend people to do who are interested in this world?
Jaimi Goodfriend: [00:27:03] Not everybody, certainly not everybody can afford to. And I couldn't have afforded to, to trade stocks when I was, when I was younger. But I think following a couple of names every day for a year, pick 2 or 3 of interest to you every day after close after the market closes. Maybe look at the standard deviation or percent change from the day before. And if it looks like it's more than, I would say like almost two standard deviations beyond yesterday's close, there's probably a reason. And so maybe for most of, out of the year, if you think about standard deviations, maybe ten, maybe 20 trading days a year out of whatever, 252, it's for a reason. And you look up the why. Maybe the why is specific to an earnings release of the company itself. Maybe it's of a competitor, maybe it's a macroeconomic event. Whatever the case might be, if you do that practice every trading day, dig in when the deviation is significant. In a year's time, you'll probably know a lot more about that company's behaviour. Why, how the stock moves and feels than you did a year or a year earlier. And so just that simple practice, which anybody can do with or without a bank account, I think will teach people how much interest they have in, in this business, because that's what the business isn't just about researching companies. In fact, that's part of it. But you can do a lot of different jobs in research. I think the distinction I'd like to make is that this job is about market moves and about stock movements, and it's underpinned by good research habits and processes. And so, knowing that you enjoy research really isn't enough. It's really do you enjoy stock movements? Do you enjoy markets? And I think that practice will help educate people on whether this is for them, because there's a little bit of risk involved, and people have to feel that a little bit. We do have a reading list. I invite people to come to our website. There's a whole host of different kinds of books, ranging from Market Wizards and Habits of Great Traders. And, again, thinking about habits to deep dives on market history, historical market situations or companies.
Jamie McDonald: [00:29:08] Jaimi, I think that explanation you just gave about following a few names for a year and market moves is one of the better explanations I've ever heard about what it takes to be a good hedge fund manager.
Jaimi Goodfriend: Thank you
Jamie McDonald: I really appreciated that. Jaimi, this has been fantastic. Thank you so much. Before we finish the website to go to has got so much information. I've been on it quite a few times, and you've done a great job of putting up there how to apply, when to apply and all that stuff.
Jaimi Goodfriend: [00:29:33] Check out point72.com/careers. The careers page is always updated. We always have the latest on what's available, what you can download. Tips and tricks to help you learn about our business, about interviewing, and invite you to apply to the multiple opportunities that we try to offer to educate people on, on what we do and how you can be a part of it.
Jamie McDonald: [00:29:54] Jaimi, I've had so much fun talking to you today. So thank you so much for your time.
Jaimi Goodfriend: [00:29:58] Thank you so much for having me. Really appreciate it.
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Jamie McDonald: [00:30:16] Thanks once again for listening everyone and please as usual, give us a follow like or subscribe wherever you get your podcasts. The information contained in this podcast does not constitute a recommendation from any LSEG entity to the listener. The views expressed in this podcast are not necessarily those of LSEG, and LSEG is not providing any investment financial, economic, legal, accounting or tax advice or recommendations in this podcast. Neither LSEG nor any of its affiliates make any representation or warranty as to the accuracy or completeness of the statements or any information contained in this podcast, and any and all liability therefor, whether direct or indirect, is expressly disclaimed. For further information, visit the show notes of this podcast or lseg.com
