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A new study suggests that strong bloodlines and a quality education may make up for limited experience.

Strong bloodlines can only help your chances of killing it on Wall Street, says rat study

When it comes to launching your own hedge fund, it’s all about pedigree. Institutional and private investors give tens of millions of dollars to freshly launched hedge funds because of the name, reputation and track record of the people behind them. Or, in some cases, they do it because of the name, reputation and track record of their father.

The Wall Street Journal just came out with an interesting piece on a newish trend concerning the young offspring of Wall Street titans, who are starting launching their own hedge funds very early in their career – and successfully raising capital. An unknown portion of money, as you might imagine, comes from their parents.

The latest examples involve the sons of billionaire investors Howard Marks and Ken Moelis, who are each prepping to launch their own funds over the next six months, despite being in their 20s, according to the report.

Now that is not to say they have no experience. But it’s limited. Marks graduated from the University of Pennsylvania – the top ranked school for Wall Streeters – in 2009, and then took a job at hedge fund Blue Ridge Capital. Moelis was in Marks’ class at UPenn but stuck around to get his MBA. He worked at Serengeti Asset Management until earlier this year.

And it appears the duo plan on doing more than just investing their own cash. Marks reportedly told industry execs that he expects to raise as much as $200 million from his father and other family and friends, according to the Journal. No word yet on Moelis’ fundraising goal, but dad will only be an investor. He won’t have any ownership stake.

While we’ll have to wait to be certain if strong bloodlines and a quality education will make up for limited experience, nature tells us that it just may. Preliminary results of a new study involving rats suggest that good traders tend to bear similarly-gifted offspring.

In the study, authored by Michael Marcovici, rats were trained to press red or green “buy” and “sell” signals based on the sound of ticker tape movements in staged foreign exchange and commodity futures markets, according to a blog post on The Enlightened Economist. If they made the right call, they were fed. The wrong call resulted in a mild electric shock. The rats “outperformed some of the world’s leading human fund managers,” according to Marcovici, which is kind of sad.

But fear not. The best performers were then bred. Their offspring outperformed the first generation. So, if the rats have anything to say about it, young Marks and Moelis are going to be just fine.

(h/t to Matt Levine for the blog link)

Could Tom Brady Have Won a Job on Wall Street? (eFinancialCareers)

New England Patriot quarterback Tom Brady just posted his old college resume, which included an internship at Merrill Lynch. We had experts critique his resume and assess the chances it would have earned him a Wall Street interview.

Goldman Loses Second FX Head (WSJ)

Goldman Sachs just lost another top currency exec. Mitesh Parikh, the bank's European head of spot foreign exchange trading, is moving to the buy side. His former U.S. counterpart, Steven Cho, left the bank in February.

BNP Chairman Out (WSJ)

BNP Paribas Chairman Baudouin Prot will step down from his post in December. The news comes just a month after the French bank settled with U.S. authorities over its dealings with sanctioned countries. Prot’s successor will be named this week.

Bad Connotation (Fortune)

London-based ISIS Private Equity is changing its name, for rather obvious reasons. The new brand will be announced in the coming weeks.

Nothing For You (WSJ)

Here’s a breakdown of the fees paid out to all the banks that worked on the record-breaking Alibaba IPO. The one big takeaway: Who did Bank of America anger over at Alibaba? Every big bank except BofA got at least a taste of the $300 million in fees Wall Street took home.

Why I Left Pimco (Reuters)

Former Pimco Chief Executive Mohamed El-Erian has finally opened up on his rather messy departure from his former employer. His reason for leaving was normal: to spend more time with his family. El-Erian said he received a list from his 10-year-old daughter of 22 milestone events in her life he had missed.

Wall Street Mobbed By Protesters (MSNBC)

Monday was not a good day to be working on Wall Street. Protesters who believe banks have stymied climate change regulation with their support of fossil fuel providers marched through the financial district for seven hours dressed as polar bears and other frigid animals. Over 100 people were arrested.

Buzz Around the Office

Because I’m a Masochist’ (NY Post)

The New York Mets can’t get out of their own way, both on and off the field. The latest blunder was a social media campaign that asked Twitter followers to explain why they are Mets fans. “I love to complain, I appreciate having a good cry over sporting events, and also because I hate myself,” was one of the tamer responses.

Quote of the Day: “At the 3-4 top schools that I recruit at (including my own) the number of students who are interested in [investment banking] has more-or-less halved over the last few years. If you want to get into IBD, no matter what you background prior to attending a top MBA program, it's pretty easy as long as you are not a total douche and you are well prepared for interviews.” – an anonymous banker on the ease of finding a Wall Street job with a top MBA degree

AUTHORBeecher Tuttle US Editor

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