Physics-quant turned financial guru Dr. Richard Bateson, who worked at Man Group plc, and was Head of Dimension for Man’s AHL multi-strategy systematic fund, including the Evolution and Genesis funds, has left his position at Man Group to establish a new asset management firm based in London, named London Quantitative Investments (LQI), according to a company press release today.
Commenting in the LQI’s corporate press release, Richard Bateson, the firm’s CEO said, “Trend following strategies have disappointed in recent years and many investors are now looking for an alternative. LQI will provide attractive, high liquidity strategies uncorrelated to traditional trend followers.”
A prominent Chief Investment Officer and author of several papers and books on physics and finance, previously was an associate of the Oxford-Man Institute, Oxford University, and a Research Committee member, prior to which he held the role of CEO of MGIM- an investment manager running assets in excess of $2 billion- and Managing Director at the Royal Bank of Canada.
Forex Magnates reached out to LQI, and according to a company spokesperson, Mr. Bateson has been on a six-month garden leave with Man Group since March of this year, and officially joined LQI in September, according to the firm’s public announcement in today’s press release.
Leaving the World’s Largest Hedge fund to Start Your Own
LQI is a new independent boutique asset manager and advisor based in London, according to the corporate website description. The firm is regulated with the UK FCA under the name Altera Partners Management Ltd, which it describes as together offering investments and advice to banks, corporates, investment companies and very high net worth individuals.
Mr. Bateson has a first class degree and a doctorate in Physics from Cambridge University, according to his profile description on the LQI corporate website and is the author of “Financial Derivative Investments” (WSP 2011). He has also written many physics papers as noted above, and as per Richard-Bateson.com.
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The company describes its offering as including structured certificates and managed accounts on the Altera-LQI Managed Account Platform, and trading in a wide variety of assets classes including equities, bonds, FX, commodities and credit, and using actively managed strategies which use computer algorithms developed by the firm.
The strategies are described as having been designed to produce stable long-term capital growth in all market environments and apply to a wide range of liquid asset classes, as described above, with investments made in these asset classes using highly liquid futures options, OTC and forward markets.
This is aimed to also achieve position-level transparency for investors, high liquidity and an extremely competitive fee structure, as per the description which includes clients having a choice of high quality brokers and custodians to remove counter party risk and to provide security.
The Scientific Nature of Markets
As many parallels exist in comparing data in financial markets to that of data found in analyzing the interstellar universe, the skill sets that a physics PhD can bring to finance has evidently been gaining considerable attraction in the realm of quantitative finance, as more and more companies look beyond the standard MBA for market analytic capabilities in new hires.
Accordingly, LQI states that its investment methodology is based on innovative principles and robust statistical effects that have been well-documented in academic literature and have long-term actual track records.
Forex Magnates confirmed with an official company spokesperson at LQI, that the firm is aiming to commence trading customer funds by mid-December of this year, and has already done extensive back testing on out-of-sample data (not curve-fitting) as well as paper trading on a demo, and actual live trading with the firm’s proprietary capital.
Considering Mr. Bateson’s already established background in quantitative finance, and his ability to argue causality and duality of events (such as market-related, in addition to quantum mechanics and relativity) in his contributions to science, it will be interesting to see the performance of the new LQI funds, using the approaches described on its corporate website.