Feb 3, 2022
Megan Tobias Neely is a sociologist whose book Hedged Out: Inequality and Insecurity on Wall Street takes a deep look inside the world of hedge funds, those small boutique investment banks that play with a sizable chunk of the world's wealth. Neely's book draws on her observations from time working in a hedge fund as well as from dozens of interviews with professionals in the industry. In this conversation, we discuss:
- How hedge fund managers justify their value to society and why there are reasons to doubt them
- The internal culture of firms and how they resemble feudal kingdoms
- Popular myths, such as the idea that the "only thing that matters is whether you make money for investors" and "the firm is horizontal and non-hierarchical"
- How people with degrees in astrophysics and artificial intelligence find themselves using their skills to make money for rich people rather than doing what they love
- How super-wealthy men convince themselves that their decisions are based on objective reason when they are often based in stereotypes and prejudice
- How a savvy actor with access to capital can actually take advantage of these blind spots through "perception arbitrage"