In an article published on July 12, 2024, Bloomberg
published a list of the biggest hedge funds getting off to great starts to the
year, naming Quantedge Global Master Fund among well renowned peers such as D.E.
Shaw’s macro fund, Marshall Wace’s TOPS quant fund, Citadel’s tactical
multimanager fund.
Quantedge, a single portfolio manager, has a track-record
of almost 18 years of market-beating returns, averaging 20% net annualised
returns since inception. Such aggressive compounding would lead to a day-one
investor growing each dollar invested 23 times.
The article describes these fund as getting off to one of
the best starts to a year, aided by stocks and quantitative investing.
Quantedge invests in close to 300 different markets within
its ultra-diversified quantitative investment portfolio, which deploys both
risk premia and market-neutral strategies. The fund is up +17% as of the end of
July, with gains largely coming from currency long-shorts, equity risk premia
and equity long-short strategies. Its dynamic asset allocation approach
involves re-evaluating the attractiveness of strategies daily and rebalancing daily.
Suhaimi Zainul-Abidin, CEO for Quantedge Capital remarked
that “We had a good year in 2023, when the fund made 30% on the back of tail
wind on equities risk premia and commodity long-short bets. We’re continuing to
make gains from equities, but our currency long shorts have been more
profitable this year, thus far.”
When Quantedge launched its fund in 2006, it started with a
modest $2.8 million under management, with a goal of running a systematic
investment strategy that targeted a high level of portfolio volatility to
deliver outsized long-term returns. Its growth into a large hedge fund (>
$1billion) over the years has been nothing short of remarkable. While Quantedge
continues to grow its assets under management, it has no plans to launch
additional funds or products, preferring to focus on a single investment portfolio
for the benefit of investors.
“We’ve always promised our investors that all our resources
are devoted to optimising our single investment portfolio. Our employees invest
alongside all our external investors, and together make up the biggest investor
in the fund. Our interests are fully aligned”, Suhaimi added.
When asked about future returns, Suhaimi clarified that
Quantedge is not able to predict the future. He said “We don’t make predictions
about whether the next day, week or month will be good for the markets. It’s
anyone’s guess because the possibilities are endless. But looking at the
markets today, we can say that the odds are in our favour. The current high-interest
rate-environment benefits our investment strategy by making safer markets more
attractive alternatives to risk ones for participants looking to de-risk. This
drives lower correlations across markets, which should enhance the performance
of well-diversified strategies like ours.”
Quantedge’s investors include institutional investors such
as reinsurance companies and university endowments from across the globe.
However, most of its investors are high net-worth individuals and family
offices based in Asia, being investors who have both a long-term investment
horizon and the ability to tolerate short term volatility.
From Vritimes
