HF Strategies protected from quants

Interested in hearing views on which strats in the future that humans will retain an edge in. I'm thinking merger arb (and other event-driven), distressed sovereign debt analysis and discretionary global macro.

Comments (4)

Aug 11, 2019

Traditional long/short equity remains pretty well protected... quants have a hard time getting at qualitative information that comes from sources like meetings with company management and domain experts. And even if we did find ways to collect that data on scale, there would be no way to backtest it because we don't have it historically.

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Aug 14, 2019

You just picked the most likely candidate for least protected...?

Aug 17, 2019

Should clarify my point, I agree long/short equity is the least protected, I was just trying to point out that even the most likely candidate for being competed out is not at much risk.

Too many people panic about losing their edge to quants, when the reality is quant equity is quite different from discretionary long/short and there is plenty of room for both. Just look at how low the absolute correlations are on the returns of major multi-managers running traditional long/short vs. major quant equity shops.

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Aug 14, 2019
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