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bne Tech
June 14, 2019 www.intellinews.com I Page 17
Quant funds keeping It simple and effective
Ben Aris in Berlin
“Quants Run Wall Street Now” used to be a com- mon headline in the financial press, but the en- thusiasm for high-powered number crunching has faded. Ed Thorp has been credited with be- ing the godfather of quantitative investing. Thorp was the first to use probability theory and the law of large numbers to beat the financial market in 1960s, but a lot has changed since then.
Yesterday’s quantitative investing has become to- day’s algorithmic trading, which has become more and more complicated. International financial companies, the big banks and asset managers have become in a mathematical arms race. They invest into super powerful computers and poach the best mathematicians (quants), who develop
Algorithmic trading should not be backed by a risk-management system. It should be based on it
sophisticated models in the hope of catching some market inefficiency or spotting a new and as yet unexploited correlation.
Obviously only the top global financial giants can afford to participate in this arms race – and even they are not always very good at it. ITI Funds, a Guernsey based portfolio company that is part
of the Da Vinci Private Equity Fund II, has taken
a different line: “keep your quantitative strategy simple.” So far the fund has put in a good track with an average annual rate-of-return above 50% over the last five years, which puts it on a par with the world’s best quant funds.
Read the full story here
Russian internet major Yandex and online bank TCS flirt with merger idea
The heads of Russia's internet major and most valuable digital company Yandex and county's leading commercial lender and only pure online bank TCS Group discussed the idea of a merger during the panel at the Saint Petersburg Interna- tional Economic Forum.
The head and main shareholder of TCS Oleg Tinkov argued that Russia will follow the
Chinese model of conglomeration of large online resources with leading lenders, suggesting that one such conglomeration could form around Mail.
ru internet major, MegaFon mobile operator, and quasi-state Gazprombank.
Yandex, is another major player and could either team up with Russia's largest bank Sberbank or TCS, Tinkov suggested, estimating that a united Yandex-TCS entity could be worth over $20bn.
"A company like Yandex needs a bank. They can either set up their own or merge," Tinkov argues.
Read the full story here