The quantitative hedge fund industry is on the brink of surpassing $1tn of assets under management this year after breakneck growth from rising interest in more systematic, computer-powered investment strategies.
The amount of money managed by quant hedge funds tracked by HFR, a data provider, rose to more than $940bn by the end of October 2017 — nearly double the level of 2010 — and flows have continued to be strong in the fourth quarter, according to hedge fund executives.
An explosion of interest in automated, algorithmic investment approaches, ranging from the simple to high-octane strategies powered by artificial intelligence, has driven the surge. Even many traditional hedge funds are now hiring data scientists and programmers to reshape themselves into quants.