Quant Leader Departs Vanguard

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Quant Leader Departs Vanguard

Postby stratton » Thu Jan 10, 2013 7:01 pm

Quant Leader Departs Vanguard
Quant Leader Departs Vanguard

Vanguard announced that the firm's principal and head of equities, Sandip Bhagat, will be leaving the firm to pursue other interests. Bhagat, 52, joined Vanguard's quantitative equity team from Morgan Stanley in January 2009 when he was recruited by Vanguard's then-chief investment officer Gus Sauter (Sauter has recently retired from the firm, as previously announced). No replacement has been announced yet for Bhagat.

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Re: Quant Leader Departs Vanguard

Postby Sam I Am » Thu Jan 10, 2013 7:21 pm

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Re: Quant Leader Departs Vanguard

Postby HueyLD » Thu Jan 10, 2013 7:42 pm

Best of luck to Mr. Bhagat. I have read a few of his publications on vanguard.com and appreciated his knowledge and insight. Hopefully he left for better opportunities even though Dan Weiner has "not so favorable" speculation about Bhagat's leaving.
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Re: Quant Leader Departs Vanguard

Postby nisiprius » Thu Jan 10, 2013 8:17 pm

Sam I Am wrote:Hmmmm, I wonder if Mr Sauter is building a team.
Sauter is one thing... Sauter and Bhagat starts to look troubling.

"Once is happenstance, twice is a coincidence, the third is enemy action."--Some character in Ian Fleming's James Bond novels.
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Re: Quant Leader Departs Vanguard

Postby livesoft » Thu Jan 10, 2013 8:20 pm

I wouldn't worry as quants had a pretty bad year in 2012. For example, http://www.bloomberg.com/news/2013-01-0 ... osses.html
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: Quant Leader Departs Vanguard

Postby Wagnerjb » Fri Jan 11, 2013 10:13 am

Sam I Am wrote:Hmmmm, I wonder if Mr Sauter is building a team.

I wish him well in his next life, whatever that might be.

Sam I Am


Maybe you misread the quote about Sauter hiring Bhagat. It was a reference to Sauter hiring him many years ago....not today. I have not heard that Sauter is setting up his own company and is stealing Bhagat to join him.
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Re: Quant Leader Departs Vanguard

Postby Wagnerjb » Fri Jan 11, 2013 10:26 am

You often see "coincidences" like this in the Corporate world. Let me be clear that I have no idea what truly happened, but here is one possibility that happens regularly:

Rising star hires an individual A many years ago and some mutual loyalty forms over the years. This individual A rises quickly to a high level, on the heels of the Rising Star, who turns into a superstar. Over time, people begin to wonder how this individual A achieved such a lofty level, as his performance doesn't seem to warrant it. Individual A seems to be a survivor of corporate changes and turmoil, despite the apparent underperformance. One day, the Superstar retires. Very shortly thereafter, individual A leaves or retires. Bottom line - the Superstar protects Individual A (either directly or indirectly) and prevents him from getting pushed out. But when Superstar leaves, the new executives quickly do what should have been done 5 years earlier.

Another common occurence is when the new executive takes charge, he brings in a few of his trusted assistants for senior positions. In this case, the reason for departure isn't necessarily underperformance - it is politics. In some cases, younger people pushed out in these circumstances will end up being hired by another company in the industry for similar positions.

To reiterate, I have NO IDEA why Mr. Bhagat is leaving. Just explaining that these departures are sometimes more than meets the eye.

Best wishes.
Andy
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Re: Quant Leader Departs Vanguard

Postby Fallible » Fri Jan 11, 2013 1:15 pm

Wagnerjb wrote:You often see "coincidences" like this in the Corporate world. Let me be clear that I have no idea what truly happened, but here is one possibility that happens regularly:

Rising star hires an individual A many years ago and some mutual loyalty forms over the years. This individual A rises quickly to a high level, on the heels of the Rising Star, who turns into a superstar. Over time, people begin to wonder how this individual A achieved such a lofty level, as his performance doesn't seem to warrant it. Individual A seems to be a survivor of corporate changes and turmoil, despite the apparent underperformance. One day, the Superstar retires. Very shortly thereafter, individual A leaves or retires. Bottom line - the Superstar protects Individual A (either directly or indirectly) and prevents him from getting pushed out. But when Superstar leaves, the new executives quickly do what should have been done 5 years earlier.

Another common occurence is when the new executive takes charge, he brings in a few of his trusted assistants for senior positions. In this case, the reason for departure isn't necessarily underperformance - it is politics. In some cases, younger people pushed out in these circumstances will end up being hired by another company in the industry for similar positions.

To reiterate, I have NO IDEA why Mr. Bhagat is leaving. Just explaining that these departures are sometimes more than meets the eye.

Best wishes.


True, we don't know why Bhagat is leaving, but I think the scenarios you mention are plausible and also similar to what anyone who's been in the workforce long enough would've witnessed. A possible third scenario is that Mr. Bhagat simply saw a new direction his area was taking and that it was not right for him - hence time to move on.
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Re: Quant Leader Departs Vanguard

Postby Calm Man » Fri Jan 11, 2013 2:00 pm

I know that Sauter was in charge of the index funds but I believe the effect of his departure will be absolute zero except for possibly a lower salary for his replacement. Computers handle this type of thing just fine.
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Re: Quant Leader Departs Vanguard

Postby mack123 » Fri Jan 11, 2013 3:00 pm

These guys at the top don't have low salaries, regardless if it's a younger guy like mcisaac or if it's sauter who has been there for a number of years. And his "index responsibilities" won't be replaced by a computer. He's a manager. .not a trader
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Re: Quant Leader Departs Vanguard

Postby Sam I Am » Fri Jan 11, 2013 3:11 pm

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Re: Quant Leader Departs Vanguard

Postby Fallible » Fri Jan 11, 2013 3:32 pm

Sam I Am wrote:
Wagnerjb wrote:
Sam I Am wrote:Hmmmm, I wonder if Mr Sauter is building a team.

I wish him well in his next life, whatever that might be.

Sam I Am


Maybe you misread the quote about Sauter hiring Bhagat. It was a reference to Sauter hiring him many years ago....not today. I have not heard that Sauter is setting up his own company and is stealing Bhagat to join him.


Nope, I didn't misread the quote. It is just in Corporate America when one sees an upper-level exec leave, then one of his hires also leaves, SOMETIMES there are new opportunities together afoot.

Sam I Am


This is pure speculation of course, but it seems possible that Bhagat hoped to stay at Vanguard, even with a new team in the works. After all, he didn't leave until Sauter was gone and well after Sauter's departure was announced, and since he was hired by Sauter he may have known, or surmised, that Sauter was leaving even before the announcement. Often, when top-level employees like Bhugat know the guy who hired them is leaving, they pretty much know what's going on and what's to come and they don't wait around to find out. They are top level and will be ready to move on quickly to new opportunities, although apparently Bhugat is still pursuing those. Again...just speculation.
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Re: Quant Leader Departs Vanguard

Postby HomerJ » Fri Jan 11, 2013 3:51 pm

Why would Vanguard need a quant team anyway?
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Re: Quant Leader Departs Vanguard

Postby umfundi » Fri Jan 11, 2013 4:42 pm

Just explaining that these departures are sometimes more than meets the eye.

And, often less than meets the eye.

"Other interests" is doublespeak that his departure was probably not entirely voluntary. Or, he's going to wait out his non-compete agreement before they tell us his landing place.

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Re: Quant Leader Departs Vanguard

Postby Random Musings » Fri Jan 11, 2013 5:16 pm

In the near future, we will come to find out that Sauter and Bhagat were double index agents who ended up back with their Cayman Island arbitrage team to take advantage of those new indices implemented at Vanguard :twisted:.

That South Korea change smelled funny from the beginning.

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Re: Quant Leader Departs Vanguard

Postby stlutz » Fri Jan 11, 2013 9:52 pm

Why would Vanguard need a quant team anyway?


Managing index funds is a quantitative process, especially when the fund does not hold all securities that are in the index, as for example, with the total bond market index fund. Also many of Vanguard's active managed funds are at least partially managed by Vanguard's quant group.
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