It’s a strange time to be in the quantitative hedge fund business. To all outside appearances, the revenge of the nerds is complete: Firms are literally showing off their eggheads to visitors and throwing stupid money at people who know what pornography is when their algorithm sees it, but maybe not a credit default swap. Said people are helping their employers suck up all of the money. Best of all, they have broken the seemingly invincible self-confidence of their jock rivals.
On the other hand, while everyone wants to put their money into the machine, those machines are, uh, not infallible. No one knows this better than quantitative pioneer Man Group. It learned long ago that robots can make mistakes. Big, expensive mistakes. Unsurprisingly, it wishes to minimize those mistakes, and to that end purchased Oxford University to figure out this whole machine-learning thing for it. And, in the interim, it set up the similarly-named Oxon unit to figure out new, better ways to invest quantitatively. Unfortunately, there are none, and so Oxon is no more.
The “quantitative incubating” unit, part of Man Group’s $18.8 billion AHL division, was opened about a year ago to develop new ways to make money, the person said, asking not to be identified because the information is private. The Oxon unit, led by Francois Moreau and Jaco Vermaak, gave internal capital to individual fund managers to use mathematical models to trade across asset classes. Moreau and Vermaak will stay at the firm and the five money managers at the unit have left, the person said.