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Goldman Sachs Exchanges
Bigger markets, more alpha: Capstone’s Paul Britton on running a derivatives hedge fund
Feb 28, 2025
Paul Britton, Founder and CEO of Capstone Investment Advisors, delves into the evolution of the derivatives market and the art of managing risk. He shares his experiences from the 2008 financial crisis, emphasizing the need for strong risk frameworks. The conversation highlights the current low VIX amidst economic turmoil and the competition between hedge funds and private assets. Britton also discusses leadership qualities, balancing curiosity with consistency, and the impact of AI in finance, all while maintaining personal values like humility.
33:18
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Quick takeaways
- Paul Britton highlights the critical evolution of the derivatives market, creating significant opportunities for institutional investors despite increased competition.
- The importance of robust risk management frameworks, reinforced by experiences from past market crises, is emphasized for navigating unpredictability in finance.
Deep dives
Origins of Capstone Investment Advisors
The founder and CEO of Capstone Investment Advisors started the firm in 2004, driven by insights gained from his background in the options market. Recognizing the shift towards a technology-based competitive landscape in market making, he aimed to create a global investment firm that could handle various asset classes. This vision was fueled by a desire to provide clarity on global market dynamics and meet the needs of institutional investors. As a result, Capstone successfully grew to manage approximately $11 billion in assets over the years, underscoring the effectiveness of that foundational vision.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode