Control what you can, says alumni investment expert

10/9/2008 - The stock market can’t be controlled, but one thing that Kellogg School of Management students can exercise command over is acquiring the deep strategic knowledge that positions them for success.

Kellogg graduate David Kabiller ’87 spoke to students at the school during an Oct. 8 visit. Kabiller is the founding principal of AQR Capital Management, a Greenwich, Conn.,-based investment management company.

“Continue to invest in your skills — that’s the most empowering thing you can do,” Kabiller said. “Fortunes can change, but what can’t is your knowledge. So take control of the things that you can.”

With about 100 students in attendance, Kabiller spoke about the challenges AQR faces in the current volatile economy. He recounted how AQR was on the cusp of an initial public offering in late 2007 before a fragile Wall Street climate led to a nearly $1.5 billion loss in two days. As a result, the IPO was withdrawn.

In the future, Kabiller said he expects to see hedge fund closures or consolidation. He also foresees the commoditization of hedge funds. He said AQR is surviving the tough market by focusing themselves as an asset management company. This year, the company unveiled DELTA, a series of hedge fund beta strategies.

Kabiller said students ultimately should “do what you love” when selecting a company after graduation. He added that it is important to seek an opportunity that offers good training early in one’s career; he indicated that his preference was toward larger companies that have more resources to offer younger employees looking to hone skills before possibly moving onto boutique firms or starting their own company.

Kabiller began his own career with Goldman Sachs, which he said allowed him to gain knowledge in various sides of business, before he helped start AQR in 1998.
“At Goldman, I was at a vantage point, so I was able to see and experience a lot,” Kabiller said.

Robert Korajczyk, the Harry G. Guthmann Professor of Finance and director of Zell Center for Risk Research, introduced Kabiller at the event. Afterward, Korajczyk remarked, “David gave our students an interesting perspective of the dynamics of the recent financial crisis and its implications for the asset management industry.”

Kabiller’s visit was hosted by the Kellogg School’s Career Management Center.