Morning Coffee: Most eccentric macro hedge fund manager shows polymaths still matter. Citi copied the Goldman Sachs AI banking team

Hedge funds with fancy Greek or Latin names sometimes draw good natured cynicism from the sell side traders and analysts who serve them.  Naming your fund after a word meaning “wise” or “agile” or otherwise “good at investing” is in some ways a safe option, but it is often regarded as slightly pretentious, conveying the sense that you regard all this money making stuff as a bit vulgar compared to your true passions in ancient philosophy. Which is a tough look to carry off, if everyone remembers you as a smallcap equities salesperson who used to drink beer out of a shoe.

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Tekmerion Capital, however (a global systematic macro fund with $1bn under management) seems like it might be the real deal.  Its co-founder, Zachary Squire, wrote an undergraduate thesis on Cicero which he is turning into a book.  And he is nobody’s pseudo-intellectual; although majoring in classics, he also studied quantum cascade lasers at Princeton University, along with trade policy, legal anthropology and Italian opera.

Presumably because of these polymathic interests, he received an unsolicited phone call asking him to apply to DE Shaw and delay his postgraduate studies in classics.  This led him to end up at Bridgewater, where he apparently excelled on the famous “dot rankings” and met Larry Mincone, Tekmerion’s other co-founder. (Go on then, it’s apparently “irrefutable proof” in Greek philosophy, but literally means “a boundary stone”).

Things then took something of a turn.  Mincone and Squire both left Bridgewater for other jobs but when (along with Squire’s old friend, Reed Morrissey) they got back together to set up Tekmerion, Bridgewater got cross that some of the slides in their pitch deck had a sort of Ray Dalio-esque feel to them.  The resulting arbitration judgement went extremely badly for Bridgewater, with various executives being described as “evasive” and having “manufactured false evidence”.  Mincone and Squire won the case in 2020 and got their legal costs awarded, but the team broke up shortly afterward, with Mincone going to another fund and Squire and Morrissey generating a decent track record before taking Tekmerion to Brevan Howard in 2024, from whence it is now emerging.

To some extent, this seems to show that if you can handle Ancient Greek and quantum physics, macro investing is a easy by comparison.  (For any polymathic readers who fancy a try, the arbitration judgement suggests that Squire started to build his systematic approach by reading a book called “Expected Returns: An Investor’s Guide to Harvesting Market Rewards”).  Of course, if you were really as smart as Zachary Squire, people would probably have recognised it by now.  But in a world of increasing specialisation and dullness, it’s good to know that there are still old-fashioned general purpose geniuses out there.

Elsewhere, Citigroup seems to be the latest bank to join the trend of setting up a specialised AI Infrastructure group in its investment banking division.  As with the Goldman Sachs “Global Technology Infrastructure” team, this reflects the underlying economics of the clients.  There are some “tech” companies who write software and algorithms, some “tech” companies that deliver burritos by bicycle, and some “tech” companies that build huge sheds in the middle of nowhere which need massive amounts of electricity and cooling water.  The different types of tech clients have very different financing needs, and the “sheds and utilities” tech team will be a lot more adjacent to the private credit markets than to Silicon Valley venture capital.

In the current environment, that might be more glamorous rather than less.  Many of the smartest investors and bankers are looking toward heavy industrial assets, power and real estate as the hottest new sectors, while software companies are having a hard time convincing anyone that they have a future in a world dominated by vibe-coding.  And the new Citi team is being led by senior rainmakers like Ric Spencer and Ashish Agrawal, with a mandate to “break silos and evaluate all pockets of capital available”.  So for ambitious young bankers who want to get a wide range of experience in a team that’s likely to be paying well, it’s a good direction to face in.  Just don’t expect the sushi or vegan dining options to be fantastic on all your client field trips.

Meanwhile...

James van Geelen, the author of the Citrini Research blog post that was blamed for a mini crash in the stock market, is a little bit awestruck to discover that he has such powers. (Bloomberg)

“So you feel uncomfortable doing the job you were hired to do?”  It’s more than a decade ago, and they’ve already been fined for it, but the story of Deutsche Bank’s involvement with Jeffery Epstein, and the way that employee concerns were brushed off, still makes pretty painful reading. (FT)

Megan Hogan, Goldman Sachs’ global co-head of talent (and until last year, chief diversity officer) has confirmed that she will be going to Morgan Stanley. (Business Insider)

In the early days of DOGE, a lot of people expected that Elon Musk would be able to make large cuts in government spending.  A tax economist who understood that most of the budget is fixed because of pensions and debt interest disagreed.  With the agreement of an understanding spouse, he spent his entire life savings buying prediction market contracts from people who didn’t understand the facts quite so well, making a 37% return and a six figure profit. (WSJ)

George Saravelos of Deutsche Bank is still writing FX research despite having been scolded by the US Treasury Secretary.  And although Deutsche’s top management were diplomatic about it in the first instance, they have confirmed that research independence is “absolutely sacrosanct”. (Bloomberg)

It’s got harder and harder for the writers of “Industry” to continue to top each successive season’s antics, so it’s probably for the best that the next season will see Harper, Eric, Yasmin and the gang go out on a high. (Hollywood Reporter)

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