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Bailey McCann, Opalesque New York: Quant funds are having a bit of a moment. Returns for the cohort have been on a slight uptrend and investors are beginning to look to the strategy with fresh eyes. Historically, quant funds have been a hard sell with investors that were concerned about getting involved in a "black box" strategy. But, according to participants at the recent Opalesque London Roundtable, quant funds may be more fee efficient than other strategies and that's drawing investors.
"If you look for hedge funds who have high fees and who reinvest those fees in their business as opposed to taking it out as an income to the manager, I think you find a subset of funds who have probably the most interesting business opportunities in front of them," says Keith Haydon, Chief Investment Officer, Man FRM. "Many of those guys are quant funds. It’s quite hard if you run a discretionary equity long/short fund with an investment team of say three or four, and somebody says, "You have made $50 million more than you need, how do you now plan to reinvest $50 million in running your small equity long/short fund?" That’s quite difficult to do with a suitable ROE. But looking at the quant space, I have seen more creative solutions to the question about where you can go next and what you can do with regard to buying new datasets, the speed of execution, and so forth."
Many quant funds including Man AHL, Winton Capital, and Aspect Capital among others are working on larger...................... To view our full article Click here
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