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Alternative Market Briefing

The Quants are back - told they should diversify, use enhanced proprietary models and better risk management at QuantInvest (day 1)

Wednesday, September 24, 2008

By Benedicte Gravrand, Opalesque London: Yesterday's Terrapinn conference on quantitative investments in London, QuantInvest (details), was full, indicating a strong interest in this analytical style that seems to have fallen from favour since last summer.

The quantitative analysis technique seeks to understand behaviour by using complex mathematical and statistical modelling, measurement and research. By assigning a numerical value to variables, quantitative analysts try to replicate reality mathematically.

Illustrating some of the thoughts that flied around, a quant researcher told Opalesque that now was the time to invest as the 12-month momentum, which started in August last year, had just finished. "Investors have shied away from stocks but now want to enhance and add more factors to the quant processes - although they don't want to change directions - against defaults of all sorts, as the credit crisis will affect everything, including industrials and consumers," he added. "Managers now want to know how to reduce the risk of sharp defaults."

Quant investing after the credit crisis: will it ever be the same again? Tim Wong, CEO at AHL, said that the benefits of quantitative (quant) investments were an objective and disciplined investment approach; a transparent and repeatable process; the ability to process a greater amount of information......................

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