Risk control central to hedging success

Ewan Kurk, who is a former partner of Goldman Sachs, launched his hedge fund corporation named Cantab Captial Partners in March 2007. Their return was about 50 percent in last year. Interesting thing is that Mr. Kurk wanted good mathematicians to lead their company in front. I was wondering why Mr. Kurk did not hire experienced people to lead their company. However, he wanted to focus on designing good hedge fund models. If they have good models, Mr. Kurk could operate their company easily. They have more than 20 models, and each model is expected by specific returns. In addition, they diversify their capital into those models, so they can maximize their profits by reducing risks. I think when investing firms invest their capital they usually divide their capital into risk free rate such as bonds and higher risk rate. However, Cantab Capital Partners wanted to hold more on securities of higher rate of returns if they think those are worth. Moreover, Mr. Kurk mentioned that if people lose their money in invest, they tend to blame their bad luck, and if they earn, they think their skills are good. Thus, Mr. Kurk also educate ethical attitude to their employees to not to have vanity. I think the ethical education is really needed for every company.


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