ExodusPoint's 2022 struggles is a lesson for all of Wall Street: Play the hits

TGIF! Dan DeFrancesco in New York, but I’ll be on my way to China shortly to pick up my new Porsche that was accidentally priced at an 88% discount. (Who am I kidding, I couldn’t afford a Porsche that was discounted 99%.)

Fun-fact Friday: Scotland’s national animal is the unicorn (and no, it’s not a VC thing). 

On tap, we’ve got stories on Bridgewater’s new 37-year-old co-CIO, a new fintech CEO who is eyeing an IPO, and the first set of jobs AI is coming for

But first… if it ain’t broke, don’t fix it. 

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“Like a Virgin” was released on November 12, 1984.

Warner Records

1. Play the hits! 

Did you know Led Zeppelin frontman Robert Plant said he’d “break out in hives” if he had to sing “Stairway to Heaven” at every show?

Oasis’ Liam Gallagher said, in much more colorful language than I can use in this newsletter, that he despised being associated with “Wonderwall.” (To be fair, Liam doesn’t seem to like a lot of things outside his beloved Manchester City.)

And Madonna once said she wouldn’t perform “Like a Virgin” unless someone paid her “$30 million or something.”

I shudder to compare some of the greatest artists of our generation to a hedge fund, but I can’t help but notice some similarities between their disdain for their biggest hits and ExodusPoint’s difficult 2022. 

As Insider’s Alex Morrell recently reported, 2022 was not kind to ExodusPoint. The hedge fund, which still holds the industry’s largest launch in history, ended the year with fewer assets, employees, and PMs than it started with. 

So what went wrong? 

In short, the firm made a big bet on building out an equities business that simply fell flat. (I encourage you to read Alex’s story to get all the juicy details.)

For context, ExodusPoint has previously largely relied on fixed-income trading to generate most of its profits

I can appreciate firms wanting to protect themselves by developing new revenue streams. But there’s something to be said for sticking to your roots and doing one thing extremely well as opposed to being mediocre at a lot of things.

Look at Mark Zuckerberg. The billionaire bet big on the metaverse, much to the chagrin of investors and his own employees. But after a difficult year, the CEO has promised a “year of efficiency” and the metaverse was noticeably absent from the top priorities he outlined during Wednesday’s earnings call.

So yes, you can be like Madonna, Plant, and Gallagher and turn up your nose at only sticking with what works.

Or you can be like Jimmy Buffett, one of the richest musicians in the world, and give the people what they want: the hits

Click here to read more about what went wrong with ExodusPoint in 2022.

In other news:

Yu Ruidong/China News Service/Visual China Group via Getty Images

2. The world’s biggest hedge fund has a new co-CIO. Karen Karniol-Tambour was tapped to join Greg Jensen and Bob Prince to help oversee the investment strategy at Bridgewater Associates. Here’s everything you need to know about the 37-year-old, along with 10 other executives leading Bridgewater in the post-Ray Dalio era.

3. Fintech Stash has a new CEO and she’s got her eyes set on an IPO. Liza Landsman, a general partner at venture firm NEA, was named the startup’s new CEO. More on Landsman’s future plans for the $1.4 billion startup, including a potential public debut.

4. The house looks great, I just want to move it a couple miles that way. Ken Griffin, the billionaire owner of hedge fund Citadel, is causing quite the stir over his suggestion that a historic home on a property he owns in Miami be relocated. Click here for more on the housing dispute.

5. Oil, and natural gas, and wheat, oh my! Goldman Sachs’ reportedly made $3 billion trading commodities in 2022. More on the group’s massive year.

6. Tiger Global is rethinking the whole investing-in-startups strategy these days. The firm continues to cut back on the size of a venture-capital fund its raising, The Wall Street Journal reports, with a new goal of $5 billion. Here’s more on Tiger resetting expectations for its plans in the startup world.

7. JPMorgan and the US Virgin Islands are pointing fingers at eachother over Jeffrey Epstein. The territory is accusing the bank of  facilitating the sex-trafficking scheme, while JPMorgan says the territory’s law enforcement should have stopped Epstein. Meanwhile, Epstein’s estate wants to be removed from a lawsuit filed by a woman who claims she was raped by Apollo Global Management’s former CEO, Leon Black.  (The Apollo cofounder says the assault never happened.)

8. Everybody needs to hand over their phones. The SEC is now asking some top hedge funds, including Point72 Asset Management, Citadel, and others, to search employees phones for discussing business on non-compliant messengers, Bloomberg reports. Read more here.

9. These are the first jobs ChatGPT will come for as part of its eventual quest for world domination. We mapped out 10 roles that are most at-risk fo getting replaced by artificial intelligence. Hint: Enjoy this newsletter while you can because I might be a goner.

10. For the clout-chasers: Nobu is opening up five new locations this year and we got a tour of its newest spot. Morocco is the location of the latest luxury hotel. Check out the new property, which starts at $430 a night.  

Curated by Dan DeFrancesco in New York. Feedback or tips? Email ddefrancesco@insider.com, tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London.