> In 2017, The Wall Street Journal reported on the difficulties faced by the firm. At that point, Voleon had an annualized return since inception of 10.5%, below the S&P 500 index return of 10.7% over the same period. One of the problems encountered was that financial markets were chaotic, and machine learning systems were best applied where patterns were more repeating in nature. In addition, patterns that are found can be easily made redundant after investors notice them and take advantage on them. Gary Smith writes that patterns discovered by the algorithms are often simply coincidences rather than actual correlations.[2][3][7]<p>> In 2018, Voleon had a return of 14% during a market turndown where the S&P 500 index dropped 6.2%. However, in 2019, its returns dropped to 7%, below the returns of its hedge fund peers of 9.2%. In 2020, Voleon's flagship fund lost 9%.[6][8]<p>Given their returns, how do they have 7.6 billion AUM?
This exchange was clarifying to me.<p><i>In a statement to Insider, a Voleon spokesman said:</i><p><i>"Like most hedge funds, in order to protect its most sensitive intellectual property, Voleon requests that select employees sign noncompetition agreements. Voleon's non-compete agreements are not a condition of employment. Those who sign it will receive a paid garden leave. Those who haven't signed it remain employed at Voleon, but may not receive access to the most sensitive intellectual property."</i><p><i>The Voleon ex-employees who spoke to Insider said their noncompete agreements did not provide paid leave. Ex-employees and other sources close to the firm said the unpaid noncompetes have been applied broadly — including to people who say they had little exposure to the firm's secret sauce. They described the firm's noncompetes as a de facto condition of employment and said the firm was taking measures to restrict employees from joining competitors as recently as this year.</i>
Does this make their entire employment contract unenforceable? And invalidate any claims of IP against their employees (past/present)?<p>Like, in Silicon Valley? <a href="https://www.youtube.com/watch?v=LOmbOfJLTKc">https://www.youtube.com/watch?v=LOmbOfJLTKc</a>
Woah. I interviewed with Voleon back in 2018. The process was terrible. Like, the worst interview process I've ever had. They offered me more than my total comp at the time, all in cash, and I was happy to turn them down.<p>They were super cagey about the non-compete. They claimed it was optional and offered additional salary if you signed it, but it sounded like it wasn't. They also claimed it was narrowly applied, and now it looks like that wasn't true.<p>Clearly dodged a bullet with that one.
> Some experts warn that the New York law, if signed by Hochul, could lead to an exodus of financial firms from the state.<p>Where exactly are they going to go? There's a reason they're clustered around NYC, similar to how big tech clusters around SV.
This is one of the few sad side effects of CA's noncompete laws: it's very hard to run a business like Voleon where there's genuinely valuable IP. It's why we have like 2 quant hedge funds here, despite all the available engineering talent