Mark Carhart grew up living in Washington State. As a child he spent years toiling on the family’s apple farms. This made him decide that he wanted a desk job when Carhart grew up. After starting his Wall Street career at a small money management firm, in 1997 Mark Carhart joined Goldman as a portfolio manager of quantitative research. (At the time he was an assistant professor at the Marshall School of Business at USC, a Senior Fellow of The Wharton Financial Institutions Center, a consultant to the money manager Dimensional Fund Advisors and a member of the investment board of Mercer Global Advisors).
The Global Alpha fund had many good years. In 2005, it almost had a 40 percent return. Assets streamed in, with the fund reaching $11.5 billion by mid-2007. However, in early August 2007, there was a sharp market decline followed by a dramatic rebound on August 13, which resulted in major losses for almost all of the top quantitative managers, and Goldman’s Global Alpha was no exception. It lost nearly 40 percent that year.
Mark Carhart and Iwanowski retooled the business, making sure that all of its quantitative process was its own research. This is where Carhart believes the team really had its edge. Anyone can examine at data, he says, the key is what you do with it. ‘It starts with intuition, and then you have to innovate.’ Returns slowly improved. Global Alpha finished 2008, a tough year for hedge funds, up 2 percent. However the unit Carhart had helped build had changed tremendously. It wasn’t surprise anyone when both he and Iwanowski announced their “retirement.”