Brew Markets — Anthony “The Mooch” Scaramucci on Hedge Funds in the Age of AI
Host: Ann Berry
Guest: Anthony Scaramucci (“The Mooch”), Founder and Managing Partner of SkyBridge
Date: October 10, 2025
Episode Overview
This episode delves into the evolving landscape of hedge funds amid the rise of artificial intelligence (AI), with insights from seasoned investor Anthony Scaramucci. Host Ann Berry challenges The Mooch to respond to the hot narrative: is AI on track to “kill” traditional hedge fund investing? They explore whether retail and institutional investors can now replicate the success of elite funds using AI, the changing value proposition of hedge funds, generational shifts in asset management, and the philosophical side of money management in a time of rapid change.
Key Topics and Insights
The Central Question: Can AI Kill the Hedge Fund Industry?
[04:21–08:29]
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AI can replicate certain hedge fund strategies, but not all:
Scaramucci explains AI can mimic some strategies (like leverage long or macro funds), but doubts it can adapt as quickly as elite human investors for now.“You can take elements of what people are doing and you can use all the different analytics, technical analytics ... and you can simulate a hedge fund return. ... But I would wonder if we have the sophistication in AI where the computer ... could adapt as quickly as the human being. So somebody like Steve Cohen or Izzy Englander and their staff, I would put them up against [AI] right now and I would say, well, they're better.”
— Anthony Scaramucci [04:21]- He compares this to chess: computers eventually surpassed humans, but we aren’t at that point yet in investing.
- His prediction: in five years, AI will replicate much more and force out many players, but not everyone.
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Hedge fund experience and adaptability are still an edge:
Scaramucci describes how, over his career, success has required shifting strategies in response to changing market trends—a flexibility he isn’t sure AI yet matches.“I'm not sure AI is going to have the facility or the 36, 37 years of market experience ... to see that trend in 2020. ... But I don't think it's there yet.”
— Anthony Scaramucci [07:51]
ETFs, Hedge Fund Fees, and the Case for (and Against) Hedge Funds
[08:29–14:04]
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Hedge funds vs. ETFs:
Berry notes that most hedge funds underperform the S&P 500, raising the question of whether their fees are justified.- Scaramucci recognizes that for most people, Buffett’s approach (buy the S&P 500 and hold) is best.
“I'm not an apologist for the hedge fund community because ultimately Buffett's right, for a large slug of your assets, you should just put it in the S&P 500 and sit on it.”
— Anthony Scaramucci [09:13] -
But...for larger investors or institutions:
- Hedge funds can offer non-correlated returns, lower volatility, and measured risk that is valuable in a portfolio—especially to institutional clients looking to diversify.
“For the average person, maybe not. But for somebody that's got a reasonable amount of money, maybe so. ... Large institutions thinking long term will want to be in those hedge funds.”
— Anthony Scaramucci [11:27] -
Industry perspective:
- The golden age of hedge funds has faded; the fashion cycle of markets matters more than pure performance.
- Scaramucci predicted assets would reach $6–8 trillion based on trends, but growth plateaued at $4 trillion as investors prioritized simpler, passive vehicles like ETFs and S&P 500 funds amid lengthy zero-interest-rate environments.
- Hedge funds are now “in the fashion business”: trends move quickly, and new asset classes come into vogue.
“I don't know. Lots of people in my industry think we're in the investment management business. I think we're in the fashion business.”
— Anthony Scaramucci [14:04]
Concentration in the Equity Markets and Risk
[15:24–18:47]
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Market concentration is at historic highs:
- Berry cites the “Magnificent 7” stocks making up 30%+ of S&P 500’s market cap.
- Scaramucci points out the top 20 companies have a combined market cap equal to the US GDP—but profits of only ~$200 billion. He likens it to the runup before the 1929 crash, citing historical caution.
“You got a $28 trillion market capitalization with $200 billion worth of profits. And so that is a glaring red light flashing on the economic and the markets dashboard.”
— Anthony Scaramucci [16:52] -
Role of seasoned fund managers:
- In times of correction, experienced hedge fund managers with proven capital preservation skills (like Tepper or Cohen) tend to thrive, and the industry “comes back in vogue.”
The Next Generation: Scientists, AI Engineers & Asset Management
[18:47–19:59]
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Emergence of nontraditional fund managers:
- Notably, a 23-year-old ex-OpenAI engineer raised $1.5 billion for a hedge fund focused on AI.
- Berry references Cathy Wood (ARK), who hires scientists, not finance people.
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Scaramucci's attitude: openness to fresh thinking:
- He supports adding diverse backgrounds to asset management teams.
- Younger hires at SkyBridge were instrumental in shifting toward digital assets.
- He cautions against “generational snobbery” and credits openness to change as a key survival trait.
“I want to have people in the industry ... that are differentiated. I don't need them to be pure finance ... I hired a very eclectic swath of people because I feel like I don't want to be that generational snob.”
— Anthony Scaramucci [20:17] -
Outlook:
- Hedge funds won’t age out as an industry yet, but specific managers will; generational turnover and technological adaptation are inevitable.
Reading, Curiosity, and Continuous Learning
[23:57–27:10]
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Berry praises Scaramucci’s “neuroplasticity” and curiosity.
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He hosts two author-focused podcasts and reads voraciously (aided by audiobooks and travel).
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Scaramucci describes reading as essential to broadening perspective, citing Jim Mattis:
“You're not equipped to go through life without reading, meaning you need other people's life experience. ... If you don't read, you're overly limiting your life experience.”
— Anthony Scaramucci [24:50]
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Practical reading advice:
- 10 pages a day = ~100 books a year; 20 pages a day = ~200 books.
- If a book isn’t working, don’t force it—don’t waste time on completion.
Podcasting Insights & The Value of Intimacy
[27:10–29:44]
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Advice for podcast hosts:
- Emphasize intimacy and authenticity; podcasts are parasocial, not broadcast.
- The audience feels like a third person in a conversation, so vulnerability and honesty build trust.
“I would say to anybody that was starting a podcast, dial into the intimacy of that. Dial into and be vulnerable and be real ... At least that guy’s a straight shooter. He’s telling me what he really thinks. And Ann Berry’s either getting it out of him or she’s also sharing what she really thinks.”
— Anthony Scaramucci [28:07] -
Berry gets praised for having “the Riz,” (charisma)—Scaramucci encourages her to use her unique strengths.
Notable Quotes
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On AI and Investing:
“There came a time that no matter what a human being was doing, the AI was infinitely better than the chess master. And I would just say we’re not there yet.”
— Anthony Scaramucci [06:37] -
On Market Cycles:
“The skirts go up, the skirts go down ... My point is we always have a new fashion.”
— Anthony Scaramucci [14:06] -
On Neuroplasticity and Generational Openness:
“We have generational snobbery, by the way, on both sides. ... I want to always be open to that and always neurally plastic.”
— Anthony Scaramucci [20:30] -
On Reading:
“If you do 20 pages a day, which I do, that's 200 books, okay? And so it adds up. ... If I don’t like a book ... I’m not a plate finisher.”
— Anthony Scaramucci [26:25] -
On Podcasting:
“It’s a one on one conversation that a third party gets to be a voyeur in.”
— Anthony Scaramucci [28:31]
Timestamps for Major Segments
- Introduction & Hedge Funds 101: [00:29–03:17]
- The Central AI Question: [04:21–08:29]
- Hedge Fund Performance & Fees: [08:29–14:04]
- Market Concentration Risks: [15:24–18:47]
- Next Gen Asset Managers, AI Engineers: [18:47–23:57]
- Learning and Reading Habits: [23:57–27:10]
- Podcasting Philosophy: [27:10–29:54]
- Outro & Market Wrap: [30:15–31:51]
Memorable Moments
- “I think we’re in the fashion business,” Scaramucci’s unique take on the cyclical nature of investment fads [14:04].
- Direct comparison of today’s market cap/profit imbalance to the eve of the 1929 crash [16:52].
- Humorous banter on podcasting “Riz” and Berry’s understated British style [29:45].
Final Thoughts
Scaramucci offers a frank, nuanced take on hedge funds’ future: while the industry isn't dead yet, AI advances and shifting investor attitudes will reduce players and change the playbook. The conversation stresses adaptability, curiosity, and continuous learning—in asset management and life. Classic “Mooch:” contrarian, self-aware, and sharply opinionated.