I've heard the buzzword thrown about a bit to describe specific teams at some MM shops and P72 thinks they are quantamental but I'm skeptical the academy really has true "quant" involved. Do people know of firms that are embracing the combination of quant trading and fundamental research is a legitimate way?

There isn’t always a huge difference but it is hard to say without knowing what you are imagining for a “quantamentalist”. In general that term is used for someone who uses systematic models and analytical techniques to help find signal out of the noise while applying a fundamental lens. So not “data mining” or just trends or similar, but rather take fundamental ideas and be able to make them systematic and have processes to “search” for information based on those fundamental views.

Like everything, there are places that do it well and those that don’t. And like with other trends (just think of “quant”) firms will use the buzzwords and market it in order to raise capital, etc. You have to understand any one strategy/type of fund/etc there isn’t any one “good” or “bad” there are just firms/people that do it well and invest in it and those that don’t.

the central team is not a central book. Rather its a team of data scientists that collate and distribute datasets. They may do some preliminary analysis but don't incorporate it into an investment thesis. It can then be bought by PMs wanting to use the dataset (depends on platform). The quantamentalists are as previously mentioned ones trying to incorporate it as part of an investment thesis. I have not yet seen it done super well. However, these teams exist at Citadel, Pt72, Marshall Wace, etc curious where you think its being done well?

"Quantamental" firms?

SReaper

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Even though the question is more around hedge funds in the US, I thought it might be beneficial to explain what is quant and fundamental in how I manage my portfolio, which is classed as "quantamental" product at my firm (long only).

It's quite a fluid term, different people define it in different ways. I came from the fundamental side, so my quant skills are not great to begin with. In my case, the quant part has nothing to do with quant trading, complex ML algos nor alternative data sets. In fact, the alternative data sets I only use to form/check some fundamental hypothesis on some names I hold (I consider that part of the fundamental area - and most people will).

So, the quant stuff. I use it in 2 places, screening/alpha testing and optimization/risk management. For screening, I pick fundamental metrics based on research and back testing and then assign alpha scores to stocks based on these metrics. This is how I create my investible universe. For risk management, as my portfolio is quite diversified, I use a quant optimizer to reduce any unwanted factor risks or exposures (or increase exposures I want to from fundamental research).

Most of the work in between screening and optimization is fundamental research. This is how I pick names, sectors, countries, and weights.

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"Quantamental" firms?

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