The rise of artificial intelligence and an on-going talent war were two of the driving forces behind Man Group’s decision to combine its two flagship quantitative investment businesses, AHL and Numeric, into a single $156bn systematic platform, according to a report by Business insider.
The newly created Man Systematic brings together more than 250 employees, including around 100 technologists, under Russell Korgaonkar, who previously headed AHL. Daniel Taylor, formerly head of Numeric, has become deputy chief investment officer of the combined operation.
The report cites Korgaonkar as saying that the merger, which was completed in June, was supported unanimously by the management committees of both businesses. The decision reflects what the firm’s quant leadership sees as two fundamental changes to systematic investing: the accelerating capabilities of AI and the need to offer researchers a broader platform in an increasingly competitive recruitment market.
For Man Group, the objective is not simply to combine assets. The firm believes bringing the two research organisations together can create a larger research ecosystem, allowing ideas and data to move more easily between teams and ultimately improving the performance of its systematic strategies.
AI is already changing the nature of quantitative research. While large language models initially had a relatively limited impact on established quant managers that had been using machine learning for years, newer AI coding tools have begun to alter research workflows more substantially.
Traditionally, Man Group placed considerable emphasis on mathematics and programming expertise when hiring researchers. AI-assisted development tools could allow people with stronger creative or market-oriented skills to contribute without possessing the same depth of coding knowledge.
That shift could change the profile of the industry’s next generation of quants, with creativity and the ability to develop investment ideas becoming increasingly important alongside traditional mathematical and programming skills.
AI is also allowing existing researchers to spend less time on routine coding and more on developing investment hypotheses, investigating relationships between markets and testing ideas that require greater intellectual input.
For Man Systematic, one of the potential benefits of the merger is the creation of a larger shared research library. Researchers are encouraged to document their work and contribute findings even when an individual project does not ultimately produce an investable strategy.
The aim is to create a cumulative pool of institutional knowledge that can be reused by researchers across the organisation.
The combination also removes some of the historical separation between the two businesses. Numeric has traditionally focused on bottom-up quantitative equity strategies, while AHL has operated with a more macro-oriented approach, including trend-following strategies.
The businesses previously maintained separate technology and research infrastructures, with limited collaboration between their respective teams.
The combined platform could allow researchers to explore a wider range of signals and strategies. Numeric researchers in Boston have already begun incorporating more macroeconomic signals into their work through greater collaboration with colleagues in London, according to the firm’s executives.
That broader opportunity set is also intended to strengthen Man Group’s ability to recruit and retain quantitative researchers.
The combined business has major operations in Boston and London, two established centres for academic and quantitative talent. Its $156bn asset base also gives researchers access to one of the world’s largest systematic investment platforms and deep relationships with major institutional investors.
The growth of the underlying businesses illustrates the demand for their strategies. Following Man Group’s acquisition of Numeric in 2014, the firm’s total systematic assets stood at approximately $26bn. They have since increased to $156bn, representing average annual growth of around 16%.
Man Systematic is continuing to expand. Around a dozen new employees are expected to join in the coming weeks, with the firm stressing that no positions were eliminated as a direct consequence of the merger.
