(Bloomberg Businessweek) -- Joe's Pub in New York's East Village might not register as a usual hangout for the Wall Street crowd, but on one night in May, you'd have thought it advertised “Quants drink free” on the CNBC crawler an hour before the close. They came to hear singer-songwriter Pete Muller, who was playing at Joe's to support Dissolve, his fourth studio album. Muller also happens to be a founding father of the modern quantitative hedge fund.
The audience isn't always this warmed up. Muller, who sings and plays piano, had just returned from a cross-country tour opening for singer-songwriter Stephen Kellogg in places including Charleston, W.Va., and Spokane, Wash. “My wife said, ‘If you want real feedback, you've got to get out and play for strangers,' ” Muller says.
This isn't a man who needs to spend time gigging in a Spokane bar to pay the rent. Ask around the hedge fund industry, and people speak in awed tones about Muller's returns over his 26-year career as head of PDT Partners, a hedge fund spun out of Morgan Stanley in 2013. Successful quants have a mystique on Wall Street: They use computers to comb through data for signals of future market moves, and their investment processes are closely guarded secrets.
Muller's rock- and soul-tinged music isn't so cryptic. Near the end of his New York set, he covered the 1984 pop hit Missing You by John Waite. His voice and conversational singing style call to mind '70s folk singer Steve Goodman. He sings about vulnerability in relationships and saying goodbye to his dying mother for the last time. The video for Muller's song Let You In has 108,000 views on YouTube. It's not Billy Joel numbers, but can the Piano Man design a statistical arbitrage algorithm?
Muller quit classical piano at age 15 only to take up jazz a few months later. After earning a math degree from Princeton, he ended up in Marin County, Calif., composing music for a rhythmic gymnastics team for a while. His current musical incarnation is rooted in a sabbatical he took from Morgan Stanley in the early 2000s. “In 2005 I made a record and distributed 100 copies to friends,” he says. “I'm still trying to track down all the copies and burn them.” To improve, he hosted a weekly songwriting workshop with fellow musicians in his downtown New York loft.
Muller is tight-lipped about anything related to PDT but says his different interests fit together. When building a model, “you always want to express an idea as elegantly as possible,” he says. “And it's the same with music.”
(A freelance contributor, Dewey is a portfolio manager at Royal Bridge Capital, a New York-based hedge fund.)
To contact the editor responsible for this story: Pat Regnier at pregnier3@bloomberg.net
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