Hedge Fund Quant Manoj Narang Losing 8% Highlights Industry Woes
2018-01-24 12:00:00.10 GMT By Vincent Bielski
(Bloomberg) -- It was a tough first year for quant Manoj Narang after a splashy launch.
Narang’s Mana Partners started trading in January 2017 after raising about $930 million in commitments, partly from JPMorgan Chase & Co.’s alternative-asset management clients.
Mana’s sheen has since faded: the hedge fund lost 8 percent last year after fees and parted ways with Chief Investment Officer Yuriy Nevmyvaka in December, according to people familiar with the firm.
Mana’s rough start underscores the trouble in quantland.
Algorithm-driven hedge funds rushed into statistical arbitrage and big-data strategies in the past two years as market volatility almost vanished, undercutting their wagers. In this increasingly crowded industry, startups like Mana also need strategies to distinguish themselves from powerhouse firms like Citadel and Two Sigma.
“This has become such a more competitive business that the days of starting off with a small, simple strategy by yourself and being able to bootstrap that into something bigger, that’s really hard now,” said Adrian Sisser, co-founder of quant firm Seven Eight Capital, which started five years ago in partnership with Steven Schonfeld’s family office that supplied capital.
“You need a sophisticated risk model and they’re not cheap.”
Mana isn’t the only quant fund to struggle. Two Sigma’s Compass Cayman Fund was down 4.4 percent through in 2017 through November, according to an investor document. Quant funds on average underperformed the industry, returning 4.8 percent last year, according to Hedge Fund Research. That’s a far cry from the almost 20 percent gain of the S&P 500 Index...
2018-01-24 12:00:00.10 GMT By Vincent Bielski
(Bloomberg) -- It was a tough first year for quant Manoj Narang after a splashy launch.
Narang’s Mana Partners started trading in January 2017 after raising about $930 million in commitments, partly from JPMorgan Chase & Co.’s alternative-asset management clients.
Mana’s sheen has since faded: the hedge fund lost 8 percent last year after fees and parted ways with Chief Investment Officer Yuriy Nevmyvaka in December, according to people familiar with the firm.
Mana’s rough start underscores the trouble in quantland.
Algorithm-driven hedge funds rushed into statistical arbitrage and big-data strategies in the past two years as market volatility almost vanished, undercutting their wagers. In this increasingly crowded industry, startups like Mana also need strategies to distinguish themselves from powerhouse firms like Citadel and Two Sigma.
“This has become such a more competitive business that the days of starting off with a small, simple strategy by yourself and being able to bootstrap that into something bigger, that’s really hard now,” said Adrian Sisser, co-founder of quant firm Seven Eight Capital, which started five years ago in partnership with Steven Schonfeld’s family office that supplied capital.
“You need a sophisticated risk model and they’re not cheap.”
Mana isn’t the only quant fund to struggle. Two Sigma’s Compass Cayman Fund was down 4.4 percent through in 2017 through November, according to an investor document. Quant funds on average underperformed the industry, returning 4.8 percent last year, according to Hedge Fund Research. That’s a far cry from the almost 20 percent gain of the S&P 500 Index...
