Schonfeld made another $200 million off volatility during the 2008 financial crisis, and used the dislocation that followed to recruit quants, luring them with capital to start a firm, a data platform to tap and the right to keep their intellectual property.

“Whether you did it on my dime doesn’t matter,” Schonfeld said. “You were the brilliant one creating all this. You should own it.”

Quant Teams
The offer helped Schonfeld compete for talent against bigger multi-manager firms that kept their traders’ handiwork. Quantbot Technologies joined Schonfeld in 2009 as one of its first quant teams. The firm extended its agreement to run Schonfeld’s capital through 2027 -- underscoring his ability to retain top talent.

The arrangement also provides protection from regulators who fined Schonfeld in 1999 for trading violations and a decade later for making round-trip trades to hide capital shortfalls. Almost all of Schonfeld’s 22 quant teams are in external firms and hold their own registration with regulators, which means they’re responsible for their own violations. Most of the fundamental equity teams are internal and come under Schonfeld’s beefed-up compliance regime.

Quants are now the backbone of the global business, deploying half of the firm’s $33 billion in gross market value, which includes long and short positions and leverage. Since 2016, when the firm converted to a hedge fund from a family office, it has raised $3 billion in outside capital, including a round this year, as the industry grapples with outflows.

Schonfeld credits his good run to old-school values of being patient and a mentor to staff -- the same qualities that work well in competitive gin.

Decades ago, after he won more money during a two-year stretch than four better players, they asked how he did it. He told them their mistake was to scold their partners for making bad plays.

“I don’t second guess,” he recalled telling them. “They can make the worst play and I say, ‘I would have done the same thing.’ Because of that, they play infinitely better on my team.”

This article was provided by Bloomberg News.

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