NEW YORK – Singapore sovereign wealth fund GIC has scaled back a core quantitative unit set up in 2016 under former Goldman Sachs Group banker Percy Wong, following a “tough” internal rethink of its investment teams and strategies.
The Systematic Investment Group (SIG), which had about 30 staff earlier in 2023, is being reorganised with some team members reassigned to different units while others are leaving to join external quant firms, according to people familiar with the matter.
Mr Wong, who joined GIC in 2012, is also poised to leave, said the people, asking not to be identified discussing a private matter. Mr Wong did not respond to requests seeking comment.
“The large majority of the existing team members will remain in GIC and continue to integrate quant skill sets into the business,” a GIC spokesman said in a statement. “We expect fewer than 10 members to leave.”
The SIG had underperformed some of its peers within GIC, said the people, without elaborating.
While some of the world’s best-known quant funds managed to deliver stellar performances during a challenging 2022 – raising the bar for similar strategies – the industry is having a more difficult 2023 even as global stocks rise.
GIC this week reported its worst annualised five-year returns since 2016, citing the slowing global economy following Russia’s invasion of Ukraine and rising inflation.
“Constantly evaluating each and every team is par for the course,” said chief executive officer Lim Chow Kiat, in an interview this week.
GIC has lots of partnerships with external managers because they are particularly good in some areas, he added. “If our expectation is that net of fees returns are going to be great, then of course we have to do so rather than build our own team.”
Quant hedge funds use detailed research, statistical modelling and maths to turn huge reams of data into investment ideas.
Firms that run these strategies have raised hundreds of billions of dollars around the world, despite some critics claiming the benefits are overstated.
The SIG was traditionally considered a core part of the fixed-income and multi-asset department, led by Fixed Income and Multi Asset chief investment officer Liew Tzu Mi.
GIC’s efforts to use data to invest started with a bang, hiring former Point72 Asset Management chief data scientist Michael Recce in 2016. Ms Fanesca Young – a quant expert from Los Angeles Capital Management – joined in 2017 and was head of global systematic equities.
But Mr Recce left the firm within months to join Neuberger Berman Group in New York, while Ms Young moved to Boston-based Acadian Asset Management in 2023, according to her LinkedIn profile.
Other efforts by GIC to drive cutting edge quant-related strategies and ideas included setting up a skunkworks called Kepler FI in 2017. The New York-based unit was wholly-owned but autonomous and supposed to create new investment methods.
Kepler eventually closed shop, with some executives leaving the firm while others were absorbed into teams including the SIG. By April 2023, Kepler’s corporate vehicles in New York and Singapore were formally shuttered, according to regulatory documents from both jurisdictions seen by Bloomberg News.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
