Q: What makes Quantbot different from other hedge funds?
We manage only a few accounts on behalf of only one investor with its own specific investment guidelines unlike other fund managers which may manage more numerous funds and/or cater to multiple fund investors. While there are thousands of advisory firms in the US, we are unique for our:
- Global Footprint: We have a consistent presence in global cash equities and electronic futures markets.
- Quantitative Methodologies: We use no manual interventions in production testing and everything is backtest based.
- Cost Transparency: With the goal of maximizing profitability, every line item of cost is measured and disclosed to the respective strategy owner.
- Retention of IP: The intellectual property of each researcher and portfolio manager is protected and retained by the individual even in the case of contract termination.
- Excellence in Technology and Operations: Our core Quantbot team were responsible for the development of quantitative models and large-scale implementation of electronic trading infrastructure at such global firms as Morgan Stanley and Merrill Lynch, where they served both the respective firm’s assets and client flows. This collective experience provides a solid base for the development of superior in-house solutions across trading, data, and risk products.
- Michael Botlo, CEO
Q: How are strategies developed here?
Let me give you a brief, simple breakdown:
- You start with an idea, let’s say you have a basic strategy in futures
- You would then work with the data team to gain access to the necessary data and partition the data into in-sample and out-of-sample
- Next step would be to work on the development code to test out the idea on the in-sample while looking at the quality of the data and outliers
- If your idea meets the in-sample performance benchmark then you would test out the idea on the out-sample data. Should the out-data meet expectations then you would work on developing trading logic and risk management using our in-house backtesting platform
- If all is going well then you would deploy the strategy in paper trading mode and track each day’s performance of paper trading and compare it with the back test from the previous day. Supported by the operations team the entire way, you would thoroughly test the strategy before going live; for instance, if some inadvertent look-ahead bias is introduced in the research process that could be caught in this paper-trading phase
- Should all benchmarks be met then your strategy is set to actual live trading!
- Ashar Mahboob, CIO
Q: Why would I choose Quantbot to implement my strategy?
For most strategies to be successful, you would need robust out-of-sample alpha as well as the ability to implement and execute your alpha with fast-time-to-market and desired implementation costs. The Quantbot infrastructure is specifically set up for the full circle of alpha development. Most of our new strategists are very surprised how quickly they can try out their ideas in our environment and then get their complex strategy ready to try out against live data in just a matter of weeks. We believe that a platform like ours, which provides consistent interface across regions, alpha durations and cost expectations, is paramount to get your idea to market.
- Michael Lisak, Partner & Co-Founder
Q: How is Quantbot keeping up with technological improvements and the latest advancements?
I think it’s kind of funny that ‘Data Science’ has recently become this cool and sexy moniker when we’ve been doing this since the 90’s. In order to do our research well, we have been constantly designing, developing and improving our infrastructure year after year to ensure each quant has all the tools he needs to do his job. When I run ‘df -h’ on our private cluster and get back numbers in P’s, it reminds me of just how significant the level of infrastructure we have at our disposal. However, the demand for data and processing is almost infinite so we also leverage the public cloud and constantly evaluate new hardware and software, such as FPGAs, Intel PHIs, GPUs, etc., to see if they can be useful in our search for profitable alpha. Our commitment to the pursuit of increasingly better technology is absolute as ultimately we are a technology company.
- Paul White, President & CTO