The Review — 14/01/2016 at 11:44

Top Quant Hedge Funds stand out with good 2015

two sigma
Last year, while the average hedge fund was losing money and several prominent hedge funds were getting clobbered by the markets, David Siegel got on a stage at a conference attended by investment professionals and declared that “eventually the time will come that no human investment manager will be able to beat the computer.”

A computer scientist by training, Siegel is the co-founder of Two Sigma Investments, a data-driven New York hedge fund firm using mathematical formulas and computer algorithims that has made him a billionaire. Two Sigma had a pretty good year in 2015. While most big hedge fund firms were shrinking in size, Two Sigma’s assets under management rocketed higher in 2015 to $32 billion from about $24 billion at the end of 2014. The firm’s hedge funds performed well, too. For example, Two Sigma’s Compass fund and its Absolute Return Fund both returned 15% net of fees in 2015. Two Sigma has been having a lot of good years in this decade.

It wasn’t long ago that quantitative hedge funds seemed to be losing their luster. They were jolted by the 2007 quant fund meltdown and some of their ambitious expansion plans didn’t work out. Jim Simons, the most famous billionaire quant hedge fund manager, retired in 2011 as chief executive of Renaissance Technologies, the firm he built. Some prominent quant funds had ho-hum years after the financial crisis and the financial media became much more focused on hedge fund managers pursuing other kinds of strategies like activism.

But the big quant funds have been doing very well and in a sea of hedge fund disappointment last year, the most prominent quantitative hedge funds stood out. Pete Muller’s statistical arbitrage PDT Partners Fund returned 21.5% net of fees of in the first 11 months of 2015. Muller’s PDT Partners hedge fund firm is now managing some $4.5 billion three years after it was spun out from Morgan Stanley. It has become another major quant force in the hedge fund universe.

DE Shaw is a $39 billion pioneering quantitative hedge fund that has been around since billionaire David Shaw founded it in 1988. Its big Oculus fund reportedlyreturned 10.2% net of fees in the first 11 months of 2015.


35 year-old bankers who lose their jobs in 2015 may never get rehired
Capula Investment Management pays boss $34.2m, increases pay and staff
The current state of salaries, bank by bank
Life after trading redux: How to leave investment banking, but stay in finance

Leave a Reply

— required *

— required *