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Digital Subscriptions > The Hedge Fund Journal > Issue 108 - October 2015 > Q&A With Brian T. Daly

Q&A With Brian T. Daly

SRZ’s Systematic and Quantitative Strategies Practice

Brian T. Daly is a partner in SRZ’s Investment Management Regulatory & Compliance Group, resident in the New York office. He advises hedge, private equity and real estate fund managers on regulatory, compliance and operational matters. Having spent nearly a decade in-house as general counsel and chief compliance officer of several prominent investment management firms, Brian is well versed in the wide range of legal and business challenges facing investment advisers, commodity pool operators and commodity trading advisers. In early October, Brian and SRZ's UK-based Regulatory & Compliance partner Anna Maleva-Otto held an event at the firm's London office, focusing on "Systematic and Quant Strategies: Current Trends and Challenges."

Hamlin Lovell: Why are more hedge funds branching out into systematic and quant strategies?

Brian T. Daly: Quant has always been a very active part of the hedge fund landscape and it waxes and wanes in popularity. Right now it is definitely on an uptick, and global allocations to the hedge fund industry are on an uptick as well, so I think you’re right, there is more quant exposure out there.

There are some new trends, however. For example, in the past managers that focused on systematic or quant tended to be "whole hog" in that one area (but there have always been some notable exceptions). Now, however, we are seeing more multi-strat managers finding a place in their portfolio for systematic or quant strategies.

HL: We've noticed that as well. Now we do see some of the larger fund managers actively putting a team together; Why is that?

BTD: Many managers are challenged to deploy and get decent alpha on large portfolios. Back when a 5 billion dollar fund was a big fund, you could be a lot more specialized, but now 5 billion barely gets you into the top tier. We have clients in the United States, the United Kingdom and even in Asia that are $20 billion or more unlevered (levered capital, of course, can be multiples of that) so it’s an imperative for those managers to find new places to deploy existing and new capital. These "places" can be new markets or new strategies, or a combination of new products and new strategies – which is what the systematic market tends to be.

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About The Hedge Fund Journal

INFORMING THE HEDGE FUND COMMUNITY With access to some of the industry’s biggest names and an astute and talented group of writers and contributors, The Hedge Fund Journal has established itself as a trusted source of information on the hedge fund industry. Highlights of Issue 108: BlueCrest - Equity strategy excels in 2015 Volatility & Uncertainty to Define 2016 - Major challenges facing market participants On Origins of Alpha - Is the stock market a quasi Ponzi scheme? InfraHedge - The largest MAP-infrastructure provider
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