The New Hedge Fund King

Amid a sea of dismal performances, a surfer dude with Einstein smarts is redefining the terms of quant trading.

- Nathan Vardi

On a recent rainy October evening, Peter Muller, 52, sits at a piano on the stage of Manhattan’s City Winery, playing with the band from his third album, Two Truths and a Lie. In between songs about love, heartbreak and relationships, like his Bruce Hornsby-reminiscent ‘Kindred Soul’, Muller describes the long, strange trip he has taken in and out of high finance.

The tieless suits in attendance, from places like Goldman Sachs and Blackstone, paid as much as $1,000 a ticket to raise nearly $55,000 for the Robin Hood Foundation. And while Muller tells them of his early discovery of music, the existential crisis of his 30s, buddies he left behind in California and his family, there is a sense that many in the room just want to be in the orbit of the hottest hedge fund manager on Wall Street today. “I know you all had your choice of hedge fund manager CD-release parties,” quips Muller. “Thank you for choosing ours.”

Pete Muller is the latest, greatest member of a growing band of hedge funds that use complex math and computer-automated algorithmic models to buy and sell stocks, futures and currencies based on statistical correlations and aberrations that can be found in the market. During 2015, when many hedge fund managers— from mighty activists like Bill Ackman to noted short-sellers like David Einhorn—lost money, Muller spun the market’s volatility into gold. The largest fund of his three-year-old PDT Partners firm, which oversees $4.5 billion, was up 21.5 percent net of fees in the first 11 months of 2015.