As the war for talent rages among hedge funds, one firm is using technology as a key value prop for recruitment and retention.
Millennium Management, the New York-based hedge fund founded by billionaire Israel Englander with $52.3 billion of assets under management, is investing in cloud technology to stand out among hedge funds.
Michael Brams joined the firm in 2016 to help build out Millennium's cloud capabilities. The first production use case, a large-scale data analytics tool set for compliance, went live in late 2017.
The firm saw how much faster its employees could test new tools and datasets using the cloud, which led it to invest more in the tech.
"One of the drivers for enabling cloud, and really investing in cloud, is we wanted to ensure that we weren't going to lose portfolio managers to another company because they had a better cloud offering than us," Brams, who is head of compute engineering and cloud, told Insider.
Millennium now has the most portfolio management teams it's ever had, with more than 265, according to Millennium's latest investor letter. The teams themselves have gotten bigger, too, with Millennium tripling the number of teams with 10 or more members since 2016.
"We saw a lot of our competitors developing very rigid offerings, where either the team would only have access to a very small subset of services, or they would have to go through a central infrastructure team that would take a long time to build out an environment," Brams added.
The battle for top technology and data science talent has been fierce, not just among hedge funds but across industries. Firms like Microsoft, Amazon, and Facebook are competing with Two Sigma, Citadel, and Millennium for the same type of talent.
There is still intra-finance competition, of course. Citadel poached Two Sigma's data chief, Andrew Janian, last summer to beef up its tech team, run by former Goldman Sachs partner Umesh Subramanian.
Millennium uses cloud to customize tech for PMs
Millennium primarily uses Amazon Web Services (with a little bit of Google Cloud), Brams said. Several hundred AWS accounts, tens of petabytes of data in the cloud, and thousands of virtual servers are running at any given time.
Brams' team is nearly 30 people and handles cloud and on-premise compute engineering. His group trains application development, portfolio management, and quant data science teams on how to use the tech, with the goal to allow them to control their own environments.
His team acts as a centralized connector point of best practices, transferring knowledge, or novel ways of using certain analytics, between portfolio management teams.
Millennium's ethos, like many multi-manager hedge funds, is to allow the individual teams of portfolio managers to run their sleeve of the fund like their own firm, highlighting the need for individual control. Because the teams' focuses are diversified, the kinds of tools and tech they use are also varied.
Using the cloud allows "them to manage infrastructure for themselves in a way that they wouldn't be able to with physical hardware and data centers," Brams said.
The percentage of portfolio managers opting to use the cloud is growing, even attracting some more fundamental PMs to incorporate machine learning into their investing strategies, Brams said, declining to share specific numbers.
And while there have been some cost savings realized from the tech, leadership buy-in for cloud was more focused on the ability to experiment faster, and enable teams to solve problems quicker, Brams said.
