Mikhail Malyshev’s search for budding tech talent has taken his quant firm Teza Capital Management to the Armenian capital of Yerevan.
(Bloomberg) — Mikhail Malyshev’s search for budding tech talent has taken his quant firm Teza Capital Management to the Armenian capital of Yerevan.
Teza is one of several quant firms that have set up shop in the city as President Vladimir Putin’s invasion of Ukraine fuels an exodus of Russians from their homeland. Others include WorldQuant, a fund backed by Izzy Englander’s Millennium Management, and XTX Markets, a London-based proprietary trading firm.
Quant funds have to compete with banks and asset managers to hire the astrophysicists, mathematicians and programmers who can turbo-charge their algorithm-driven strategies. While some funds have scored talent from Silicon Valley tech giants, other founders with roots in Eastern Europe have turned to Armenia.
“All of a sudden there is a supply-demand opportunity” in Armenia, said Malyshev, a theoretical physicist who goes by Misha. “You don’t get much experience in asset management yet” in Armenia, Malyshev, 54, said in a phone interview, “but you get very good brainpower.”
WorldQuant and XTX declined to comment.
With Moscow casting a wider net for troops to replace heavy casualties in Ukraine, many young Russians have fled the country to avoid conscription. Moreover, US sanctions on Russian banks have hampered the ability of foreign firms to pay local employees, providing another incentive for skilled workers to go abroad.
Armenia has been a favored location, in part because Russians don’t need an international passport or a visa to visit there. About 65,000 people from Russia, Ukraine and Belarus emigrated to Armenia in 2022, Fitch Ratings said in a February report, citing local officials.
This diaspora has helped turn Yerevan into a tech center, populated by many recent graduates from Russian colleges known for producing high-caliber scientists, engineers and programmers. Spurred by the influx of migrants, the Armenian economy grew an estimated 11.6% last year, according to Fitch.
Some of those employed in Armenia by XTX and WorldQuant previously worked for the two firms in Russia, according to their LinkedIn profiles, while others appear to be new recruits.
Cultural Connection
The founders of the three quant firms also emigrated from the region: Malyshev is a naturalized US citizen who hails from Shuya — a city in western Russia along the Teza River — and WorldQuant’s Igor Tulchinsky is from neighboring Belarus. XTX’s Alexander Gerko held dual citizenship in the UK and Russia before renouncing the latter in December.
“For Misha and Alex, they both understand the culture,” Peter Friedman, the founder of Integra Advisors, said in a phone interview. “They have some sort of competitive advantage when they can recruit people in their native language.”
For its part, WorldQuant, has operated around the globe for years, said Friedman, whose firm recruits quants for money managers.
Malyshev was global head of high-frequency trading for Ken Griffin’s Citadel before starting Teza, while Gerko previously worked in Deutsche Bank AG’s Moscow office. Tulchinsky worked a dozen years as a statistical arbitrage portfolio manager at Millennium before starting WorldQuant in 2007.
Chicago-based Teza began considering hiring in Armenia last May and held its interviews online, according to Malyshev. The firm’s Armenian employees mainly fill entry-level positions developing algorithms and working on other types of advanced technology, he said. Teza now has almost 20% of its workforce in Armenia.
“It’s a pool of talent that has either lost their job or quit their job in response to what has happened with the war,” Malyshev said. “Helping people to get a good job in that situation is a good thing.”
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