High-Frequency Trading (HFT) has changed Wall Street as traders continue to execute trades at incredible speeds. The HFT market has also grown to dominate the overall financial trading industry and with it, investors have managed to make massive leaps in profits culminating to the domination of the hedge fund managers’ portfolios.
According to research, the world’s top earning portfolio managers are predominantly quant traders and last year, the list of the top eight was dominated by quants.
Institutional Investor published a reported that showed the top 25 hedge fund managers took home $13 billion last year with Ken Griffin, the founder and chief executive of Citadel, and James Simons, the founder and chairman of Renaissance Technologies, sharing the top honors after taking home $1.7 billion each.
The amount earned by Griffin alone was enough to pay more than 100,000 US federal minimum wage ($15,080) earners or nearly 63 best-paid bankers judging by Jamie Dimon’s (JPMorgan Chase CEO) $27 million salary package, according to The Guardian
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There have been a lot of complaints directed towards Wall Street hedge fund managers regarding their huge paychecks compared to the level of returns to investors. Not many hedge fund management firms can justify the type of money paid to their portfolio managers as they continue to blame market volatility on declining returns to their clients.
However, some quant-focused hedge fund managers can actually take credit for the kind of money they make. One of the best performing quant-focused asset management firms over the last three years has been Leman Capital Management, which is an Algo-trading investment company based in the UK.
According to the firm’s results from last year, as quoted by several reports, Leman Capital Management outpaced 99% of quant-focused hedge funds for the last three years in a row, including 2015, in which it delivered a return of well over 60%.
Leman Capital’s performance in the current calendar year remains well on course to beat its own achievements of last year after managing an average monthly return of 5.8% compared to last year’s 5.2%. As of June 30, 2016, Leman Capital had YTD return of 34% and nearly $90 million worth of assets under management.
