Sun, Oct 13, 2019
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Investors, hedge funds will run into challenges with machine-learning technologies

Thursday, December 15, 2016

Komfie Manalo, Opalesque Asia:

Computer-driven investing and machine-learning technology are becoming more and more popular in the hedge fund world.

But Richard Warfield of OTS Capital Management, a value-oriented long-short equity hedge fund, said that these technologies have one distinct disadvantage: They are not very good at telling why they make decisions, and Warfield believes this is going to be a major issue at some point.

"Now, obviously the quant trend is partly driven by new technologies around machine learning," Warfield said during the latest Opalesque 2016 Hong Kong Roundtable. "If a fund is down, particularly if it’s down significantly or for longer periods, investors want to know ex post why the fund is down, why a decision was made, and why you expect performance to turn around, or otherwise the inclination is to redeem. It can be very difficult to give a convincing explanation if you are dealing with some of these technologies."

Pitfalls with data-driven investments

Manoj Narang, who is launching a new $1bn hedge fund MANA Partners, said that while the hedge fund world is very excited with computer-driven investing and quantitative strategies that use computers to study data and make decisions, ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. People: MFA announces 2019-2020 board of directors, Eastspring CIO departs amid broader restructuring, Former Two Sigma managing director Karyn Williams rolls out consulting firm[more]

    MFA announces 2019-2020 board of directors Opalesque Industry Update - Managed Funds Association (MFA), the leading trade association for the global alternative investment industry, today announced its 2019-2020 Board of Directors. The new Board represents a diversity of hedge fund firm

  2. PE/VC: Funding for China's private equity market falls by a third, US private equity fights its biggest political battle yet, U.K. DC plans could get higher returns by investing in venture capital[more]

    Funding for China's private equity market falls by a third From Axios: Private capital investment in China slowed markedly in the first half of the year, data from the Emerging Market Private Equity Association released Tuesday showed. By the numbers: Capital invested in China's private

  3. Venture firm Mithril Capital says it has been under assault by its former general counsel[more]

    It's been a strange year for Mithril Capital Management, the venture firm cofounded in 2012 by Peter Thiel and his longtime associate Ajay Royan. Though Mithril enjoyed its biggest exit to date in February, when Johnson & Johnson agreed to pay $3.4 billion, plus another potential $2.35 billion i

  4. Gen Z and Money: Will the youngest generation of adults drive FinTech?, Robo-Advisor to offer actively managed portfolios based on hedge fund holdings[more]

    Gen Z and Money: Will the youngest generation of adults drive FinTech? Findings released in the Logica Future of Money Study show that Gen Z is pioneering work opportunities in a social and tech-based workforce. Key findings also indicate an increasing interest in computer-based advice to

  5. CTAs slide in September[more]

    From Institutional Investor: Commodity trading advisers had a post-summer swoon in September. After posting two strong months of performance in July and August, the computer-driven strategy - also called managed futures - reported losses mostly ranging between 3 percent and 5 percent last month.