Coming For Your Trading Desk

Money managers are expensive and getting easier to replace.

- Saijel Kishan

JOBS

Rishi Ganti used to help manage the personal fortunes of hedge fund founders David Siegel and John Over deck, whose quantitatively driven strategies turned them into billionaires. Ganti, 45, says he’s glimpsed the future of his industry. A wave of coders writing self-teaching algorithms has descended on the financial world,and it doesn’t look good for most of the money managers who’ve long been envied for their multimillion- dollar bonuses.

On a cold spring day, Ganti, clad in a gray hoodie, takes quick sips of Earl Grey tea at a bakery in Manhattan’s Tribeca neighborhood and explains that many of his peers don’t yet realize their careers won’t last. “Algorithms are coming for your job—they only ask for electricity,” says Ganti, jabbing his finger on a lime-green laminated table. “Algorithms are already reading, processing, and trading the news even before the photons have hit your retina.” Yet few money managers are alarmed by the threat. “They’re anesthetized,” Ganti says.

He started plotting out the impact of algorithms while working for Siegel and Over deck at Two Sigma Investments, before striking out two years ago to start his own firm, Orthogon Partners Investment Management Co. To survive, Ganti says, money managers should look beyond the multi trillion-dollar stock exchanges, bond-trading platforms, and big deals backed by private equity and venture capital. To a greater or lesser extent, computers can see all those markets, assess how they’re performing, and start detecting patterns that could reveal profitable trading strategies.