BlackRock is overhauling its flagship quantitative investment strategy in a bid to compete more directly with traditional hedge-fund heavyweights, according to a report by the Financial Times.
The asset manager is adding stockpickers to its quant fund Systematic Total Alpha (STA), thereby combining human and data based strategies. It reflects a wider industry move away from individual managers running their own funds.
STA had $7bn in capital as of October, compared to the $90bn client assets from BlackRock’s hedge fund business. STA’s attempts to compete with industry giants such as Citadel and Millennium reportedly faces challenges from its comparatively small size, and use of the “2 and 20” fund structure, both of which limit the fund’s ability to attract talent in an industry where pay has skyrocketed.
