On May 25, Montecito resident Pete Muller held an album release party on the rooftop of the Kimpton Canary Hotel for Spaces, his recently released album recorded with his band The Kindred Spirits. Throngs of his fans turned out, along with supporters of the nonprofit One805, which Muller introduced to his fans. Some guests, including myself, came out to see the secretive hedge fund superstar who turns out to be a very talented musician. In a rare interview, Muller shared some morsels of info on his hedge fund and discussed music and philanthropy.
In 1992, Muller joined Morgan Stanley, where he formed the wildly successful group Process Driven Trading (PDT), which used quantitative models to manage an investment portfolio. In 2013, because of the Volker Rule, he went out on his own, forming the hedge fund PDT Partners. According to Pensions & Investments, PDT has $8 billion in assets under management. This level of assets wouldn’t be so remarkable for a hedge fund, except that the majority of its assets are internal. By 2020, all external investors in its main fund, the Partners Fund, had been fully redeemed. Since then, the fund only invests the money of employees, former employees, and Muller. Two smaller funds, the Mosaic Fund and the Element Fund, have internal and external investors.
When asked about PDT’s recent performance, Muller murmured, with a humble laugh, “We do okay; we do more than okay.” The karma of his interactions with investors, Muller…