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The interesting childhood of one hedge fund manager

Getting into a hedge funds is tricky business. It helps to have an internship lined up (or completed) if you want a job there – but it helps even more if you start preparing for that job before you learn what taxes are.

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Dmitry Balyasny spoke to students at the London School of Economics’ Alternative Investment Conference yesterday, and shared one of the most important parts of his development into a trader (and eventually founder of a global multi-strategy hedge fund).

“I remember my first job when I was a kid in middle school,” Balyasny said. “I was selling stuff door to door.” That job opened his eyes to what sales really means. “Whenever it rained, most of the kids would go home,” he explained. “I quickly learned that that was the best time to knock on people's doors. Because nobody wants to turn away the little kid trying to make a few bucks in the soaking wet at their doorstep.”

That middle school experience informed his adult career – but also the rest of his teenage years.

Later, he “mostly did sales jobs when I was in in high school and early on in college,” Balyasny said. That had a pretty straightforward motivation (“I wanted to make money”) and a benefit which most jobs at that age couldn’t provide.

“The only way you can make money as a younger person is to get paid a percentage of what you do, in the form of commission. Nobody's going to give you a good salary,” Balyasny explained. “Commissions are a market mechanism – just like a percentage of trading profits.”

Working in sales leads to a pretty diversified skillset, as it turns out, that can be transferred pretty easily. Balyasny worked his magic in a number of different avenues – “from radio commercials to steaks to kitchens, other products, and then eventually went into finance, as a broker selling stocks.” That was “also sales,” he pointed out.

Even though Balyasny’s motivation was entirely financial at the time, there were other benefits that he didn’t appreciate until later in life. “It turned out to be super useful,” he said. “It really teaches you a lot of grit and perseverance.” He called all sales the “skill of selling yourself. Selling your business” – something you have to do your entire life. “The more you can hone that ability, and own the kind of resilience psychology, the further that goes in life.”

It was through situations like that that Balyasny developed into the founder of… Well, Balyasny (Asset Management). “Learning that type of psychology early on, that work ethic, I think is really, really useful. I'd recommend sales for some portion of your training goals,” he advised the students.

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AUTHORZeno Toulon

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