Chess Business
Hedging Genius
In the age of the "Madoff Mate,” a hedge fund company heavily uses chess in its promotional materials. Chess Life investigates.
By C.K. Damrosch & Dr. Jonathan Knight
fan. Our owners, Fred and Jeff Wilpon, are two of the longest investors in Bernard Madoff’s hedge fund.
I
f I had a bias against hedge funds, it had been developed during a long off- season as a New York Metropolitan
It became a matter
of some obsession on sports talk radio as to whether they should/could/did know that Madoff ran a Ponzi scheme. My two takeaways were that 1) A hedge
fund manager should be able to describe in plain English their investment strategy, and 2) A constant rate of high returns is mathematically impossible, and is in fact the sure sign of a fraud. My initial skepticism of Genius Hedge
Fund (GHF) however was of a chessic nature. During the course of doing inter- views for last year’s “Chessanomics,” (Chess Life, December, 2009) Bruce Pan- dolfini and I had shared a laugh about business’ obsession with chess. Bruce had said it wasn’t important that it actu- ally be true that chess can help your business acumen, only that “they think its true.” Historically, I can remember a time in
the 70’s and early 80’s where Wall Steet firms would run ads hoping to recruit “high level chessplayers.” Over time, it became “high level chessplayers and math- ematicians.” Eventually, it was just “high
36 Chess Life — July 2011
Genius Hedge Fund’s logo. According to press reports they are so named because they actually have genius I.Q.’s. You be the judge. As Malcolm Cowley said,
“Talent is what you possess; genius is what possesses you.”
structuring, it is an inverse one. If we can be honest for a second about our chess institutions, the most common word asso- ciated with them would be “broke.” The allegorical homeless grandmaster
level mathematicians and statisticians.” My own experience is that if there is a
relationship between excellence with pawn structure and excellence with financial
aside, who are our great captains of industry? Kasparov made a few rubbles, he certainly excelled in endorsements of chess equipment. But considering he is the Michael Jordan of his sport, he did- n’t exactly slam dunk: no long term relationships with top advertisers. So much of Genius’ hype, though, is
chess related. For example, I went to Genius Hedge Fund’s website, to find this: “Our leaders developed their friend-
ships through ardent games of chess; this challenged their mental capacities and required the highest levels of math- ematical strategy and analysis. Mastering the skills necessary to succeed in chess stimulates us and is integral to the prin- ciples of our company.” I’m skeptical. I decide to read on to
find out more about the three partners of Genius Hedge Fund, who from press reports all claim to be actual geniuses. From their posted bio’s:
ALEX RABINOVICH: Persuasive, confi- dent manner coupled with innovative suggestions and ability to find solutions in any situation. Known for a unique ability to establish and sustain positive relationships with enterprises, executives and clients internationally. Alex is regarded as not only as a worthy adver- sary but a team builder, using his logical
uschess.org
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