Dear Showtime Execs,
I read with great interest (and no small amount of trepidation) about your plans to create a new series based on the hedge fund industry. As I understand it, “Billions” will be based on the interactions of a high finance hedge fund manager (Bobby “Axe” Axelrod) and US Attorney Chuck Rhoades played by character-actor everyman, Paul Giamatti.
As you begin filming, I would like to take a moment to point you towards some of the scintillating “real life” hedge fund moments the series should capture.
1) Most billion-dollar hedge fund managers are named John or David (16 total), with names like William, Kenneth, Robert, James or Paul close seconds. After 17 years in the hedge fund industry, I have yet to meet anyone that goes by a moniker like “Axe.” My guess is that in today’s more institutional climate, a nickname like that would be an impediment to raising assets and would be discontinued either by the manager or discouraged by the compliance department. A name like Axe is like speeding in a red sports car. You may be ok, but chances are you’ll attract the wrong kind of attention.
2) Despite the inference that hedge funds frequently engage in insider trading, the actual practice appears to be pretty limited. There are an average of 50 insider trading cases each year, and even if all of them were centered on hedge funds (they aren’t), the percent of hedge funds that engage in nefarious scams and rip-offs is, in fact, tiny. Assuming all 50 insider trading scams were perpetrated by hedge funds each year, that would comprise less than 0.05% of the industry. Perhaps it would be better to focus on things of which hedge funds are more routinely guilty. Maybe Giamatti can focus on investigating bad pitch books, using conference speaking opportunities to pitch product, or maybe even strategy drift?
3) Oh, and when you send “Axe” to an industry event, try to limit the amount of hookers you cast and the amount of illegal drugs you showcase. Most events these days start at 8:00 am continue through cocktails at 6 to 7pm. At cocktail parties there are regularly a shortage of bartenders, making getting a drink a time consuming and sometimes almost Herculean task. As a result, alcohol consumption can be fairly self-limiting. After cocktails there are inevitably investor or service provider dinners, which, given the number of invited diners and courses, can easily add an additional three hours to your day. Since many of these dinners are hosted at long tables in private dining rooms, you can be sure that there will be limited opportunities to interact with others. Be sure you like the folks sitting either directly next to or in front of you or it will feel like an even longer night. There will be one or two obligatory toasts from the hosts. People will check their email under the table throughout. It’s truly a bacchanal.
Of course, there are some event-goers that still have the energy for extracurricular activities after that long working day, and these activities are primarily dependent on the location of the event. At the largest industry event, SALT, you’ll usually find a good live band playing after hours, and, since it is in Las Vegas, you will definitely find some attendees at the Blackjack tables. I have heard of a few attendees winning up to 10 grand. There may be some hookups, but I honestly haven’t seen any Hangover-type antics of late.
In fact, I’ve attended more than 300 conferences during my hedge fund tenure and I’ve yet to witness much debauchery, other than an emergency call one night to inquire if I had any handcuff keys. (For the record, I did not.)
I do, however, see some serious caffeine abuse, so scenes with hotel staff frantically filling coffee urns and/or attendees complaining about the lack of mid-day refreshment would be good. Sugar and caffeine are probably the most common form of “drug” abuse.
There is also a lot of looking for other people (trying to meet prospects you don’t know, one-on-one meetings, fellow panelists, etc.) so include some random time wandering around looking at nametags. Since those are often on lanyards, if you want a hint of lewd make sure those nametags are displayed right around crotch level – most conference organizers do.
You’ll also want to capture people making off with the good conference tchotchkes – a scene with a mild-mannered manager with his pockets (or oh-so-masculine conference tote bag) filled with golf balls and a stuffed flying monkey for his kids should work.
4) You should also focus a great deal on the business and operational side of running a hedge fund. Make sure you film people watching mandatory HR harassment training, having to get multiple sign offs just to get a monthly letter out the door, filling in performance numbers on 6-8 hedge fund databases every month, trying to come up with some pithy market commentary, taking and maintaining the Series 7, 24 and 63 exams, meetings with services providers and pestering the fund’s auditor for K-1s and financial statements. Oh, and include folks updating SEC filings - that stuff makes for SEXY television.
5) You’ll want to include investor meetings in the show, and to get as close to real life as possible, you can probably reuse this footage often. Most initial meetings are “get to know you walk through the pitch book meetings” and meetings after that may focus on an array of due diligence questions that become pretty routine after a while. To change it up, change up the food periodically. Or perhaps have an operational due diligence meeting featuring the CFO and CCO. Since it usually takes 6-12 months or more to secure an investment, make sure you showcase LOTS of meetings.
6) Since a billion dollar fund isn’t a typical hedge fund (see last week’s blog post on that topic), you may want to introduce some secondary characters that represent the average hedge fund. They should work in 1-3 person shops, and spend most of their time looking at investment opportunities and trying to find investors. They probably make about as much as a well-paid doctor, so their lifestyle should be reflected as such.
7) I wouldn’t spend too much time focusing on wardrobe for the series. Most hedge fund managers wear a fairly ubiquitous grey, blue or black suit, unless they hail from across the pond in which case you can add some kicky socks to the ensemble. And you’re just as likely to find managers in button-downs or golf shirts with khakis as you are in a power suit, especially within the confines of their offices.
Now, Showtime, I know this is not what you want to hear, but the fact is the hedge fund industry has very different street cred from its relatively mundane reality. Does that mean there aren’t scandals and good stories? Of course not. Any hedgie, including me, who has been in the business long enough can give you stories that are frankly too weird not to be true. But most of the “good stuff” happened in the earlier days of the industry, and even then it was the exception and not the rule. So while you’re focused on getting a great show together, it would be great if you could focus not just on sensationalism but also on truth.