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09 November 2016

Quant Hedge Funds Boom in Asia

Comments: Personally, I feel quant funds and algos are over-hyped currently.

More Asian hedge funds are starting computer-driven strategies, as investors disappointed by the poor performance of some traditional funds search for better returns.

In Singapore, $2 billion multi-family office Thirdrock Group has launched a quant fund, and Lucerne Investment Partners is considering starting one next year. Charles Wang, a former portfolio manager at Bosera Asset Management, is about to launch a vehicle on OP Investment Management’s platform in Hong Kong, where Hantak Investment Advisors plans to next year open a version of the quantitative fund it runs out of Beijing.

“Asia has long been dominated by equity strategies,” said Will Tan, a managing director at Principle Partners Pte in Singapore, which specializes in recruiting for hedge funds. “However, they have disappointed recently. So investors are seeking to diversify and turn to systematic trading in particular, as those investment styles have less correlation with other markets.”

The growing Asian interest in computer-driven funds is part of a global shift, as investors bet machines, devoid of emotion, are better placed to make money or protect their capital in volatile markets. While China equity hedge funds have outperformed quants by a wide margin in three of the past four years, they’ve lost 1.2 percent this year through the end of September, underperforming algorithmic strategies investing in Asia by 4.6 percentage points, according to data provider Eurekahedge Pte.

Link: Quant Hedge Funds Boom in Asia

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