Former Hedge Fund Manager Offers Professional Development Advice
October 5, 2012
Mila Sherman periodically rethink Alternative Investments, their two-year-old course for seniors in finance and MBA students. The course, he notes, offers a guided tour of high-growth instruments like credit derivatives and structured products-rarely taught financial topics, especially to undergraduates.State-of-the art finance is reinventing itself so rapidly that visits by practitioners in the classroom have become a necessity, not an enhancement, emphasizes Isenberg finance graduate Jerry Hong '93. "Electronic trading, derivatives, and outsourcing have fundamentally changed the job landscape for graduates," he notes. "We've run through a whole life cycle of financial products in the past decade; finance-related topics have been changing at breakneck speed." That he says, is why he and Isenberg finance professor
A retired partner at ZAIS group, which specializes in asset management of structured and mortgage-related products, Hong was responsible for his firm's distressed credit and hedge fund platforms. He managed ZING 1, the 1999 Deal of the Year for the first resecuritization of structured credit, and the ZAIS Opportunity fund, which won Absolute Return's 2006 Fixed Income Hedge Fund of the Year. Before joining ZAIS in 1998, Hong worked at Merrill Lynch and Citibank trading foreign exchange. Today, he serves on the boards of Wombat Security and SAIL Financial Services.
On his first of several presentations in this fall's alternative investments course, Hong urged students to embrace financial innovation, critical thinking, and big-picture inquisitiveness about political and socioeconomic trends. At the same time he cautioned against narrow specialization with financial products. "Massive efficiencies [in automation and outsourcing] have reduced the need for people," he told the students. "Employment at the New York Stock Exchange has fallen from 6,500 before the recession to 2,000 today. Those jobs are never coming back. In the financial community, it's not just traders; lawyers, accountants, and others have lost their jobs. Wall Street remains significantly overstaffed with a very high likelihood of continued significant layoffs in the coming months."
Resilient investment bankers and traders drive their businesses through ideas and innovation, he continued. That requires developing adaptable, ubiquitous skills, especially in the post Glass-Steagall world, with its increasingly hybridized investment-commercial banking products. "With today's technologies and my skill base, I can do my work in Uzbekistan," he observed. "Don't become overspecialized and don't do what everyone else is doing-differentiate yourself!" he emphasized. "I never cared about being wrong," added Hong in advocating the virtues of critical thinking. "I don't like to read things that agree with my view. You need to get used to being wrong," he advised.
As future financial professionals, you'd better be avidly inquisitive about the global economy and global financial markets, he remarked in a discussion of Asian markets, including decelerating demand in China. "All in all, the tail risk [i.e., risk of extreme adverse outcomes] in the global economy is the greatest in my lifetime," he told the class.
Hong is helping Dean Fuller and Development director Ed Brozman develop a comprehensive strategy to engage Isenberg alumni with one another and with Isenberg students as mentors and in the classroom. "It's been eye-opening to discover our fantastic alumni network-its wealth of knowledge and influence," he notes. To accelerate the engagement process, Hong brainstorms periodically with the dean and other alumni. "We're trying to build "kinship" by identifying tiers of graduates at different stages of their careers. Each generation of alumni, I think, should feel the responsibility to involve the next generation." Segmentation by generation, he adds, can improve alumni involvement in student professional development. Senior alumni, for example, can give students valuable macro-advice, while graduates two years out can offer field perceptions of what to expect after graduation.
In mid-October, Hong will join the dean in his "School of Hard Knocks" freshman professional development seminar. That's certainly a younger, more heterogeneous gathering than in Alternative Investments. But Hong hopes to energize the freshmen with insights from his own career and a critical message: Work with Isenberg, its Chase Career Center, and independently to develop yourself professionally from day one. And we will help you to secure a meaningful internship early in your Isenberg career.