- Credit Suisse’s quant hedge fund QT closed this week, several sources told Business Insider.
- The hedge fund was run by Nicholas Bra nca and had more than $600 million in assets last year.
- When the fund closed, it had $519 million in assets under management.
- Many quants were hit hard in March, with names like Bridgewater, Renaissance Technologies, and Point72’s Cubist suffering big losses.
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A tough stretch for many quant funds — which has been, according to some sources, worse than 2007’s “quant quake” — has forced one to shut down.
QT Fund, a quant hedge fund run out of Credit Suisse’s asset-management arm by Nicholas Branca, closed this week, sources said. The hedge fund, which ran more than $600 million last year, closed with $519 million in assets.
Sources said one of the fund’s largest investors pulled out of the fund after the firm was hit hard by the never-before-seen market volatility in March, which was brought on by the coronavirus pandemic.
Credit Suisse declined to comment.
Quant funds like Bridgewater, Renaissance Technologies, and Point72’s Cubist were slammed in March as the spread of the coronavirus to the US and Europe shut down global economies.
The average hedge fund reported losses of 9.4% for the first quarter, according to Hedge Fund Research, while the overall equity market shed about one-fifth of its value during the same stretch.
For some industry observers, it was an opportunity to point out a different way of running a quant fund — reacting to real-time information quickly instead of building models that attempt to predict market moves. AQR’s former machine-learning head, Marcos Lopez de Prado, said this technique, known as “nowcasting,” should replace many firms’ forecasting.
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Adrian de Valois-Franklin, the CEO of the artificial-intelligence hedge fund Castle Ridge, even said that the old models “have no place” now.