Quant Hedge Funds and the Fear of Death, with Khe Hy – [Invest Like the Best, EP.31]

My guest this week is Khe Hy. Khe has a very interesting, two-part story. We start with Khe’s career at Blackrock, where he rose to be one of the youngest MDs at the firm, specializing in quantitative hedge funds. Khe shares his perspective on how the hedge fund landscape has changed and what investors should look for in hedge fund managers in the future.

The second part of the story is about Khe’s attempt to understand himself. We get into fear, joy, and all that he has learned across several years of introspection and exploration. His lessons coalesce around four key pillars–compassion, stillness, uncomfortable introspection, and finding truth. We explore what he means by each of these ideas in detail. I don’t think that Khe is capable of lying. He is one of the most honest people I’ve met, for better or worse, and was kind to share both his struggles and moments of clarity on investing and life.

With Deep questions about purpose and deep questions about how to evaluate a quant hedge fund, This was my kind of conversation. Please enjoy!

 

Links Referenced

Rad Reads

Books Referenced

Lolita

Show Notes

0:00  – (first question) –  A quick summary of Khe’s career in finance

1:27 – How the flow of capital works for the hedge fund business

7:09 – The process of evaluating hedge funds

11:02 – What do you look for when picking pickers of stocks or managers of these funds

14:24 – Exploring the quant funds and what Khe looked for when deciding to invest in them

18:42 – What firm or strategies intrigued Khe the most at first glance and what negative screen did he use when picking managers

21:10 – The need for repeatability in this process

22:40 – At what stage of this run at Black Rock did he feel most alive

24:51 – What was right things and what was wrong during this period

28:45 – Khe left this world when he was 30, but we’re looking to explore the catalyst for getting out

32:13 – Breaking down the difference between I vs T-shaped people

36:38 – Khe’s last day at BlackRock

39:36 – The family packs up and takes off for their own version of eat, pray, love, starting in Bali.

42:25 – What lessons were learned on that trip

46:25 – Looking at what Khe has done since this trip stemming from his newsletter

48:10 – Rad Reads and why skate culture was such an influence

50:40 – The power of consistency

52:03 – Permission to try whatever Khe wanted

1:00:02 – The mutually beneficial introductions (MBI’s)

1:04:20 – Patrick shares his experience with an MBI set up by Khe

1:05:20 – Lolita

1:06:12 – Looking at the four pillars that Khe lives by, starting with compassion

1:10:52 – Next up, stillness

1:15:53 – A look at uncomfortable introspection

1:24:22 – The last pillar “finding your bliss” or “live your truth” and how Khe figures out  the right direction to follow in life

1:29:25 – What tops the joy ranking right now for Khe

1:32:39 – Patrick questions we should look for a return on our time investment in life

1:37:33 – Most memorable day in Khe’s life

1:40:00 – Kindest thing anyone has ever done for Khe

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

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