Singapore-based Quantedge surged 22% in Q1 to an all-time high AUM and is primed for future growth.
Quantedge Global Fund surged 22% in Q1 this year to an all-time high AUM of $3.8bn, making it one of Asia’s biggest quant macro funds. The fund delivered a near 30% gain in 2023, even as the MSCI Asia-Pacific index gained 11.8% and the average Asia fund was up almost 4%.
CEO Suhaimi Zainul-Abidin told With Intelligence in an interview that directional equity risk premia strategies, market-neutral long/short strategies, and directional commodities strategies were the key drivers of first-quarter performance.
The ultra-diversified fund trades across nearly 300 markets spanning equities, fixed income, commodities, currencies and reinsurance. In addition to its core directional risk-premia strategies, Quantedge also employs long/short strategies that are dynamically adjusted daily. The fund has expanded its range of strategies over the years to include market-neutral, factor-based strategies, which have done well in the past 2 years.
Speaking to With Intelligence, Suhaimi spoke about how technology has always been at the heart of what Quantedge does. He remarked that even though AI is still nascent and developing, investment firms will already be able to leverage on AI to improve trading efficiency, speed and quality of research, and also programming.
When asked about future growth plans, Suhaimi remarked that it was “within the realms of possibility” that the fund doubles its size every three or so years. “Could we be managing $10 billion within the next 5 to 10 years? I think it’s possible. We certainly have the strategy, systems, and the people to handle that amount of capital. Whatever the case, we want to ensure that we can deliver the same or better quality of returns for our investors.”
While Quantedge’s investors include institutions such as university endowments and (re)insurance companies, a large majority of its investors are family offices and high-net-worth individuals. The fund remains open to new investors and additional subscriptions.
Suhaimi described the high interest rate environment as a healthy state to be in for diversified strategies. “When interest rates are too low, risk premia tend to be compressed with higher correlation across markets and asset classes, especially in times of market stress. That’s not healthy. With meaningful interest rates, we expect more normal risk premia levels and lower correlation between equities and bonds; between risky and safe-haven assets, which is good for any highly diversified investment strategy. There is thus good reason to be optimistic.”