After a year when the humans outperformed the machines at $6.4 billion Schonfeld Strategic Advisors, the firm's annual letter to investors emphasized just how much they've grown the people side of the business since they started.
Reminiscing on the five years that have passed since Schonfeld — which originally was the family office for billionaire Steven Schonfeld — the letter details the numbers on the growth: 85 portfolio managers compared to 48, $40 billion in gross market exposure compared to $8.5 billion, and offices in London, Tokyo, Hong Kong, and various US cities compared to just New York.
"Alongside these achievements, we bolstered our unique familial culture as a result of our focus on hiring, investing in and retaining the best talent," the letter states.
Schonfeld's focus on talent has been a critical one for the firm, especially given its goal to be the "premier equities hedge fund globally."In a presentation it gave to prospective investors in its Fundamental Equity Fund last year, it highlighted the backgrounds of the portfolio managers on the team, including 30 who have worked for at least one of Steve Cohen, Ken Griffin, or Izzy Englander.
"'Talent is our Strategy' remains our tagline and our top priority as we seek to hire, invest in, and retain our people," the most recent letter reads. The firm declined to comment further on the letter.
There were a pair of significant changes for the firm in regards to talent. For starters, long-time chief investment officer Ryan Tolkin was named CEO, the first one in the firm's history. Danielle Pizzo was given the title of chief strategy officer, also a new position, and joined the executive committee with Tolkin and Andrew Fishman, the president and COO of Schonfeld.
To keep the investment talent pipeline fully stocked, the firm created a training program known as Sapphire, which got underway in September.
"Sapphires are blue precious gemstones that symbolize wisdom. The color blue signifies trust, responsibility, knowledge, intelligence, loyalty, integrity, and care. This combination aligns with many of Schonfeld's values and has inspired the name," the letter reads.
Similar to programs at competing hedge funds like Balyasny and Point72, the training program focuses on developing young analysts into potential portfolio managers and senior firm leaders as well as improving the skills on existing portfolio managers.
"The platform consists of three pillars, each designed to support the professional and personal growth of our employees: Leadership & Management, Functional & Technical Skills, and Personal Well-Being. We successfully launched three key initiatives thus far: the Schonfeld Leadership Program, Portfolio Manager Coaching, and the Analyst Development Program," the letter reads.
Performance last year was strong — the flagship Schonfeld Strategic Partners fund returned 9.9% for investors while the Fundamental Equity fund made more than 14%. Since opening to outside capital, the flagship was made an average annual return of 14.3% and the fundamental offering has made 9.4%.
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