Quant hedge funds had a strong showing in 2024, much like their counterparts in the multistrategy space, as algorithm-driven firms achieved double-digit gains across various strategies, according to a report by Business Insider.
This includes “quantamental” approaches that combine systematic algorithms with human insights and trend-following models.
However, most of these funds fell short of the S&P 500’s 23% gain.
Leading the charge were established names in computer-driven hedge funds, such as Renaissance Technologies, founded by the late billionaire Jim Simons. Renaissance’s main investor funds – the Renaissance Institutional Equities Fund and Renaissance Institutional Diversified Alpha – returned 22.7% and 15.6%, respectively, according to a source familiar with the firm.
The Medallion fund, which manages around $12bn of internal capital, outperformed with a remarkable 30% return, as reported by Simons’ biographer Gregory Zuckerman on LinkedIn.
Two Sigma, which recently transitioned to new co-CEOs, delivered 10.9% returns in its flagship Spectrum fund and 14.3% in its Absolute Return Enhanced strategy, according to a source close to the $60bn manager.
In the UK, major players also delivered strong results. Marshall Wace’s $70.9bn alpha-capture pioneer TOPS fund gained 22.7%, while Winton Group’s $13.1bn all-quant multistrategy Winton Fund posted a 10.3% return, per sources familiar with both firms.
French quant firm Capital Fund Management, managing $16.7bn across six strategies, achieved double-digit gains across the board. Its $11.8bn Stratus fund returned 14.2%, according to a person close to the firm.
At AQR, Cliff Asness’s trend-following Helix fund posted a 17.9% gain, while its multistrategy Apex fund returned 15.1%, according to a firm spokesperson.
Graham Management saw solid performance as well. Its quantamental Proprietary Matrix fund returned 11.9%, while its trend-following strategy delivered 6.7%, said a source close to the $20bn Connecticut-based manager.
Looking ahead, these managers face increasing pressure to innovate.
Advances in artificial intelligence are fueling a race to enhance systems and processes. A new AI-focused fund from OpenAI alum Leopold Aschenbrenner, backed by Stripe’s founders and former GitHub CEO Nat Friedman, aims to develop AI systems capable of matching human intelligence.
“The industry is experiencing an information arms race with respect to how much information can be gathered and how quickly it can be processed,” a new release from Don Steinbrugge, an industry consultant who runs Agecroft Partners, reads.
“Information advantages are often short-lived, and many managers will continue investing in a host of new technologies.”
