Advice from a Russian Hedge Fund Manager Who Graduated from NYU's Stern School of Business

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eFinancialCareers spoke to Slava Rabinovich, CEO of Moscow-based Diamond Age Capital Advisors, a hedge fund with $105 million under management. This is what he told us about his career and life in general.

How did you come to work in the Russian hedge fund sector?

In 1996, I was about to graduate from the Stern School of Business at New York University and was interviewing with investment banks with a view to working in Wall Street. I also had interviews with investment banks based in Russia, such as Renaissance Capital, Alfa Bank, Creditanstalt, etc. Then suddenly I got a call from Bill Browder, the founder of Hermitage Capital Management, who had been shown my resume by mutual acquaintances. Following a lengthy interviewing process at Hermitage, I received a job offer and thought that compared to banking, asset management would be difficult to get into in the foreseeable future if I did not take it up. This aspect of finance had interested me at business school, where I was a member of the Investment Management Club. Thus after eight years of living in the U.S., I decided to move to Russia.

What inspired you to start your own fund? What kinds of resources did you have at your disposal?

I wanted to realize my creative potential, be my own boss and make money. I had two million dollars available from friends and family. My first step was to look for a so-called “anchor investor” who would receive a share in the business in exchange for investing anchor capital in the fund.

However, it soon became clear that finding such an investor was not an easy task, as many wanted an unreasonably high stake in the company, or else took too much time arriving at decisions or imposed other limitations that were unwarranted in this business. In short, my search attempts led me to decide to launch an independent fund and an independent fund management company without taking anchor capital, starting on a small scale and gradually accumulating investments in the fund by regular, non-anchor investors.

How do Russian financial services professionals differ from their colleagues in the West? Is the culture very different?

Within the Russian corporate culture, people go to work to make friends, and within the American corporate culture, they go to work in order to work.

But if you compare specialists at the same level, there will be no differences. Take for example Stephen Jennings, the main shareholder of Renaissance Capital. Jennings will be Jennings anywhere. And all the top people at the bank, be they Russians, Americans or other foreigners, are all of the caliber of leading Wall Street banks.

What do you pay attention to when you hire people for your company? What is a surefire way NOT to get hired by you?

Being a small company, we have never used headhunters and do not have an HR department. Everyone who works there has been referred to us by friends and acquaintances. A surefire way NOT to get hired would be undue arrogance combined with insufficient knowledge of the subject.

Many people hope to spend several years working at an investment bank before starting up their own business but often postpone the departure point. What advice would you give them?

Quoting Steve Jobs, “Stay hungry. Stay foolish.”

Editor's Note: This first appeared on our Russian site, but it has been edited slightly and is applicable here as well.

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