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managers. In the back office, technology is harnessed for position and portfolio monitoring, as well as tracking exposure on a real-time basis. Och's view is that as the world becomes more integrated and more complex, they can focus on the more unusual complex securities where their hedging and analytical capabilities create a competitive edge.

Stark, Griffin, and Kovner devote considerable resources to this area as well. For Stark, equities, options, and convertibles are all involved, and they each have different hedge ratios. This requires powerful risk management tools and powerful screening tools.

Griffin, who has an office in Silicon Valley staffed with 125 people, also has several dozen servers providing the backup for market feeds, risk management, and data for the front office to make decisions. Nearly half of his employees in Chicago are systems or technology professionals. The quantitative research group develops and enhances proprietary mathematical models. They provide tools for portfolio management, stress testing of the trades, and stress testing of the portfolio. In addition, the information systems group writes and maintains the code to keep the systems current. The investment and trading group identifies the investment opportunity using mathematical and statistical models, proprietary valuation techniques, and fundamental analysis.

CULTURE

Most of the organizations have developed a culture. Teamwork was a common description of the culture at Caxton, Citadel, Cumberland, Elliott Associates, Galleon Group, Kingdon Capital, Maverick, Och-Ziff, and Stark Investments. While individuals may have strong personalities, they are all part of a team culture. "The team is stronger than the individual components," says Och. "The story at this firm is not about me. We have a strong and deep team which has been together for many years." This theme was echoed by many of the managers.

Cooperman, Rajaratnam, and Singer each describe his culture as one where a strong work ethic prevails. Cooperman's culture is intense, demanding, and research driven. Singer says what makes Elliott Associates different is that they apply more resources to the task. He focuses on those areas that are effort-laden—for example, where manual effort is required. Rajaratnam compares the business to getting a report card every day.