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Harry Schwefel on Long/Short and Point72’s Commitment to Career Development

January 2024

Man speaking to students

Point72 Co-Chief Investment Officer Harry Schwefel sat down with us to discuss his role overseeing our Long/Short Equity business, Point72’s culture and commitment to career development, and his thoughts on how to achieve success in this industry. Here are highlights from the discussion.


What are your primary responsibilities as Co-Chief Investment Officer?

My primary responsibility is overseeing our Long/Short Equity business. We have a great management team and we work to support the portfolio managers (PMs) and analysts in not only their pursuit of generating returns, but also their growth and development.

I believe one of the unique things about Point72 is that we are not a one-size-fits-all firm. We have achieved real scale, however, we remain committed to running the business where all of our PM teams are different. This requires different approaches to management, different approaches to growth, and different approaches and resources for development of the PMs and the analysts on those teams.

Then stepping back, we spend a lot of time just thinking about the business as a whole. There are goals for the business and then there are goals for the firm, and I’m focused on making sure we work together to balance the two as we aim to achieve our long-term objectives.

 

Can you talk more about our professional development resources and initiatives?

We are proud of our reputation as a hedge fund that truly invests in L/S talent development, and now we have programs targeted at every stage of an investor’s career.

Originally we were focused on analysts and ensuring we were offering them the latest tools and resources to help ensure their growth curves were pointing up. We always felt differentiated in that the people coaching and mentoring them have done the job before, and we try to customize it to the individual and understand where each analyst has strengths and weakness, where they are in their development, where they want to go, and how we’re going to help them get there.

The same goes for portfolio managers – not everyone attacks trading the same way, and we want to support every PM so that they have the opportunity to perform at their best. We have a portfolio construction and analytics team that partners with PMs to identify the risks they are taking relative to the broader business and pinpoint which risks we feel they are good at taking. And for senior analysts coming through the platform or outside hires, there’s Point72 LaunchPoint, our emerging portfolio manager program. Portfolio managers that came from Point72 LaunchPoint make up half of our current L/S PMs* and has proven successful in helping new PMs make the transition and learn how to build a scalable business.

 

How do all the different businesses and groups within the firm collaborate with one another?

We are a flat, meritocratic organization, and we have a collegiality that I don’t think exists at other firms, including at firms that are much smaller than ours.

We operate with a view that many hands make light work. At the end of the day, it’s a people business, and developing relationships and knowing the people you work with is important. That’s true about both our investment teams and the different groups interacting with our investment professionals.

For instance, our Macro business continues to grow and is synergistic with our L/S team from an intellectual property and idea sharing perspective. PMs from across these businesses are constantly exchanging ideas, whether it’s a big macro day or an earnings day for the L/S side, they can help each other out and share their perspectives. Ultimately, we think about the firm as one team driving towards the same goals where you should have access to the smart people around you, and no one should achieve their own goals at someone else’s deficit.

 

How did you get interested in L/S and what has changed since you entered the industry?

I went to a liberal arts college, and I grew up in a house where we didn’t have any Wall Street footprint. My friend and I both graduated with student loans, and he planned to go to Wall Street to pay his off before going to medical school, and I figured “I can start there too.” I took a job in equity research and quickly found that it resonated with my interest in studying businesses and evaluating what separated one company from the next. The stock element of the work reinforced my curiosity because every day you can see whether your view added value or if it didn’t. I quickly fell in love with stocks and began looking for jobs on the buy-side.

Looking back, in as many ways as the industry has changed, it also hasn’t. At the end of the day, success in this business is a product of finding great ideas. It’s an ideas business, and that’s what I think everyone in the industry finds most fun.

 

What do you look for when hiring a team?

This is a game that moves quickly and there’s a vast amount of information to process and consume, so there’s obviously an element of intelligence that’s important and we want to work with the smartest people. But beyond that, we want to find people that are passionate. To be good in this business, it requires daily commitment to a process and discipline, and that’s a hard thing to fake over time. But if you love it, it’s the best thing in the world.

We also look for whether a candidate will be a fit in terms of collegiality and the desire to contribute and learn. We want people who are comfortable being in an environment where you don’t think you’re the smartest person but have a good balance of competitiveness and self-awareness to want to be the best while also engaging with those around you.

 

What’s the most memorable piece of advice you’ve received in your career?

I got a piece of advice not long after I joined the buy-side that helped me find the right balance between going full speed and having the patience to not take risk too casually with my career. The advice was basically to the effect of, “In this business, if you can create ideas that make money, you will never be lost or unfound.”

I found it to be the moment that quieted all the noise. There can be a lot of distractions and fear of missing out in this industry, and this advice would always remind me that if I can become really good at finding great ideas, it will all fall into place.

 

This is not an advertisement nor an offer to sell nor a solicitation of an offer to invest in any entity or other investment vehicle. The information herein is not intended to be used as a guide to investing or as a source of any specific investment recommendation, and it makes no implied or express recommendation concerning the suitability of an investment for any particular investor. The opinions, projections and other forward-looking statements are based on assumptions that the authors’ believe to be reasonable but are subject to a wide range of risks and uncertainties, and, therefore, actual outcomes and future events may differ materially from those expressed or implied by such statements. Point72, L.P. or an affiliate may seek to invest in one or more of the companies discussed herein.

*As of November 30, 2023