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At 5:58 in the evening on May 28, 2009, someone with the username Cambridge10 logged onto the online crowdsourced encyclopedia Wikipedia and, for the first time, created an entry for risk parity. Over the next hour and fourteen minutes, Cambridge10 made four separate edits to the incipient page, including the first external link—a paper written by Edward Qian, who is credited with inventing the term and who has worked at Boston-based firms Putnam and Panagora. At 7:12, Cambridge10 signed off Wikipedia. He or she never created or edited another page again.
The risk parity entry then languished. Like so many wedding homepages, it stayed on the Internet but was outdated and largely irrelevant. But then, over a year later, interest picked up again. Late in the evening of August 25, 2010, username AaCBrown—likely the financial author Aaron Brown, a prodigious Wikipedia editor in the financial space—executed a complete re-write of the page, adding a history of the theory as well as the first criticism of risk parity in practice. He added upwards of 20 external links, the breadth of which showed that AaCBrown knew his financial history and was in-tune with the growing strategy and the intellectual debate that surrounded it.
If Cambridge10 was the risk parity entry’s Aristotle, and AaCBrown its Isaac Newton, Keithbob is its Albert Einstein. Keithbob is a Veteran Editor IV in the Wikipedia universe—a badge earned with 20,000 edits—and on the evening of May 18, 2011, he turned his prodigious talents to the risk parity page. “Lead should be a summary of the article not a detailed description,” he wrote in the editor’s section of the entry. He then started a whirlwind of small and large changes. Over the next year, and continuing to this day, Keithbob, with few changes from any other editor, has controlled the risk parity page’s edits.
All told, there are three contributors to the risk parity Wikipedia page who have made edits of any consequence. One used a Boston-referencing username and contributed exclusively to this page, linking to a paper by a Boston-based risk parity pioneer. Another focused his or her many edits on finance and transcendental meditation, interests that mirror those of at least one founder of a risk parity firm.
Of course, no one, including aiCIO, is suggesting that Ray Dalio or Edward Qian or Cliff Asness are editing Wikipedia pages. All three have much better things to do with their time. What can be suggested, however, is that while no pension funds are allocating assets based on Wikipedia pages, and while the anonymity of Wikipedia editors is at worst annoying, this minor intrigue lends credence to a major debate emerging around risk parity: Is this investment strategy a secular shift in the way capital pools should be managed—or is it a marketing gimmick?
Going behind-the-scenes into the world of Wikipedia is an odd—even unsettling—experience. What the casual viewer sees when they arrive at the risk parity, or any, Wikipedia entry, is simply the glossy cover of a much larger book. Behind that cover, where few rarely venture, lives a subculture that is both unique and universal. Like any subculture, it has a language all its own. Each user has an avatar that can clarify or obfuscate their true identity. Some are so active as to appear to be employed by Wikipedia; others take a casual interest in one or two entries, and it stops there. Discussions between editors, like rival socialites at a party, can come across as so forcibly polite that all watching can perceive the petty tension below the surface.
This is the world we entered. All good journalism, like good detective work, starts with one source and expands, web-like, outward. Risk parity vendors, regardless of whether this is a secular trend or gimmick, have an incentive to promote its use; risk parity opponents in the asset management space have the same motive, with the opposite result. Thus, instead of turning to Bridgewater’s Bob Prince or GMO’s Ben Inker (sparring partners in the risk parity debate), we turned to one source: Keithbob himself.