144. Pete Muller, Founder of PDT Partners on Building One of the Top Performing Quantitative Hedge Funds

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Feb 22, 2025

Join legendary quant investor Pete Muller, founder of PDT Partners, as he shares insights from his remarkable journey in quantitative finance and his passion for music. Discover how his experience in high-stakes poker sharpened his risk management skills and how trust and collaboration fuel success in hedge funds. Pete also explores the emotional side of finance and the parallels between music and investing. Plus, enjoy a special musical performance that highlights the intersection of his two worlds!

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ANECDOTE

Unintentional Finance Entry

Pete Muller's entry into finance was accidental, initially prioritizing music over a programming career.
He transitioned after realizing the financial challenges of being a rehearsal pianist.

ANECDOTE

Barra and Efficient Markets

Barra, Pete Muller's first finance job, was founded by a Berkeley professor with unique office hours.
The firm's efficient market philosophy initially clashed with Muller's later poker experience.

ANECDOTE

Poker and Market Efficiency

Pete Muller's poker success challenged his belief in efficient markets, demonstrating consistent profits through skill.
This realization led him to explore prop trading at Morgan Stanley despite initial skepticism.

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In this episode of The Wall Street Skinny, we sit down with one of the most legendary quant investors of all time—Pete Muller. As the founder of PDT Partners, one of the top performing quantitative hedge funds that spun out of Morgan Stanley, Pete shares his fascinating journey. He offers a behind-the-scenes look at how statistical arbitrage strategies drive market success, the importance of building a strong research-driven team, and why trust and collaboration are essential in quantitative finance.

Beyond the trading floor, Pete’s story takes unexpected turns. From high-stakes poker games that sharpened his risk management skills to a deep passion for music, he discusses how these seemingly unrelated pursuits have shaped his approach to investing. He also delves into the emotional side of finance—how quants, despite relying on models, still experience the highs and lows of market movements, and why understanding human psychology is just as critical as analyzing data.

Whether you’re an aspiring quant, a seasoned investor, or just someone intrigued by the intersection of finance, strategy, and creativity, this episode is packed with insights.

Plus, as a special treat, we close the episode with a song from Pete Muller and the Kindred Souls—his band that embodies his lifelong love for music. Tune in for an engaging discussion on markets, models, and the unexpected ways in which finance and the arts collide.

Find more about Pete’s music at https://www.petemuller.com/

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