Steve Cohen’s difficulties in scaring up some first-class talent for his hedge-fund-turned-family-office-turned-hedge-fund-once-again have been well-documented. As has Ken Griffin’s not-entirely-helpful suggestion that he just steal some top-notch traders from other people. Now that Cohen’s a quant, however, he might want to take some advice from another guy who started his hedge fund on campus property: Jaffray Woodriff, of the Virginia Woodriffs, founder of Quantitative Investment Management.
Woodriff got his start by seizing a U. Va. computer lab for three days back in 1999, and even while he was running QIM, was spending his spare time trying to win a prize from Netflix by building an algorithm that wouldn’t recommend “White Chicks” to people who just finished “Paranormal Activity 2” or “@Suicide Room” to fans of “My Little Pony.” He was pretty good at it, but some guy in Florida was better at it. So he hired him.
After pulling eight all-nighters to get to fourth place, Woodriff noticed that nothing he did could dislodge the guy in front of him, a Florida-based data scientist named David Vogel….
After pushing their Netflix ranking as high as second, Woodriff brought Vogel on as a consultant at QIM, convincing him that his skills could translate into markets. Two years after, Vogel launched Voloridge Investment Management, with QIM later buying a 25 percent stake in the company.
Lest you think that these two are just nerds with no other quirky ideas about the world à la certain urophile, fear not.
Both have fewer than 50 employees -- a size Woodriff says he likes because it resembles the “hunter-gatherer” societies of early humanity.