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Bloomberg Markets Magazine

Bloomberg Markets Magazine October/November 2018

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Bloomberg Finance LP
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in this issue

2 min.

Clifford Asness, the billionaire co-founder of AQR Capital Management, isn’t shy about sharing his opinions. For our cover Q&A (p. 58), he spent more than five hours with Bloomberg Television’s Erik Schatzker. While their conversation was mostly about quantitative investing, it also touched on Twitter, AQR’s army of Ph.D.s, and why Asness left Goldman Sachs. Schatzker, who interviewed Morgan Stanley’s James Gorman and BlackRock’s Larry Fink for previous issues, says Asness doesn’t fit the stereotypical image of a quant. “Sure, he’s deeply analytical and fact-based to the extreme,” Schatzker says. “But he’s passionate, excitable, and funny, too.” Jes Staley has weathered some stormy times at Barclays. Now the U.S.-born chief executive officer of the 328-year-old institution is preparing for what may be his biggest battle yet—defending his investment banking tilt from…

1 min.
markets almanac

Oct 10–11 To see more upcoming events, visit {TLIV }, {BU }, and bloomberglive.com/calendar/. Bloomberg Invest London Topics will include private credit, MiFID II, Saudi stocks, and trading technology. 23–31 Major League Baseball World Series TBD Last year’s champion: Houston Astros. Nov 6 Midterm elections U.S. Voters decide on 35 senators and 435 representatives. Also there are governors’ races in 36 states and three territories. 6–7 Follow relevant news as it develops at bloomberg.com/new-economy-forum. New Economy Forum Singapore Inaugural event hosted by Michael Bloomberg in partnership with 11 companies and institutions. 12–18 Asia-Pacific Economic Cooperation summit Port Moresby, Papua New Guinea Annual meeting of leaders from the 21 member economies. 13–16 To see Comex copper: {HGA CMBQ }. All metals: {GLCO MTL }. For a metals playbook: {CPLY MTL }. For forecasts: {CPFC MTL }. Asia Copper Week Shanghai Industry experts discuss the outlook for the metal. Dec 1 Andrés Manuel López Obrador takes office Mexico Populist politician officially becomes president. 6 The Year Ahead Tokyo Bloomberg’s…

5 min.
are worldquant employees really naming their children alpha?

IGOR TULCHINSKY LAID THE GROUNDWORK for WorldQuant, a $7.3 billion quantitative hedge fund with more than 700 employees, while working for Izzy Englander’s Millennium Management. The 52-year-old native of Belarus now provides a rare look at how he built WorldQuant in his book, The UnRules: Man, Machines and the Quest to Master Markets (Wiley). Here Tulchinsky discusses his unconventional upbringing, his debt to Karl Popper, and his decision to turn WorldQuant into a “factory” that employs 140 Ph.D.s in more than 25 offices in 15 countries in the firm’s quest for 100 million alphas, or insights. You fled the Soviet Union at age 10 with your parents and lived in a cockroach-infested hotel in Manhattan. You worked odd jobs, such as washing dishes in Wichita. How did your youth shape you? My…

7 min.
robotic investing and the artisanal backlash

AT A HIGH ENOUGH level, predicting the future of investing is easy. The future of investing is that people will spend less time and money on it and that it will work more efficiently and predictably. This is also the future of driving and the present of, like, dishwashing. The ideal future of most boring, stressful, specialized, and necessary activities is that someone will build a machine to do it for you so you don’t have to think about it anymore. It’s also fairly straightforward to describe exactly what this means. Mainly it means low-cost broadly diversified index funds: Why spend a lot of time picking stocks, or a lot of time and money hiring people to pick stocks for you, when you can just get the deepest wisdom of modern…

6 min.
jbic global dollar bonds: stability amid uncertainty

JBIC’s FIRST GLOBAL DOLLAR BOND ISSUE of the fiscal year attracted heavy demand, highlighting continued investor appetite for secured returns in light of global macroeconomic and political uncertainty. Launched on July 10, the $3.5 billion triple-tranche issue was the bank’s first since November 2017, and as a result garnered significant investor attention and an order book of more than $7.5 billion. The series carries an A1/A+ credit rating and, like all JBIC issues, carries the protection of an unconditional and irrevocable guarantee by the Japanese government, reinforced by the 2016 JBIC Act that enhanced the bank’s role in supporting Japanese businesses overseas. The issue was divided into three-, five- and 10-year notes. The three-year series raised $1 billion, offering a coupon of 3.125 percent and a spread of 24 basis points above…

1 min.
green steam

ECONOMIC GROWTH has tended to come with one nasty side effect: increasing carbon emissions. Emerging markets now have an opportunity to change that. How? As developing countries grow and invest in infrastructure, many can tap into rich natural resources for clean energy. Kenya is showing the way. The Rift Valley, a trench that cuts through the country, is home to volcanoes, hot springs—and geothermal potential. Kenya’s state-controlled power generator has already plugged into it. Kenya Electricity Generation Co. owns and operates four geothermal plants in the Olkaria region of the valley. In recent years, KenGen has been diversifying its geothermal business—through consulting, commercial drilling contracts, and this geothermal spa. The 4.5-hectare resort, a two-hour drive from Nairobi, is located inside Hell’s Gate National Park, whose towering cliffs and steep gorges are said to…