$1 Billion Quant Hedge Fund to Splinter Away from Credit Suisse

Credit Suisse's QSAM fund is going independent less than a year after its launch.

One of Credit Suisse’s Quantitative and Systematic Asset Management (QSAM) funds is splintering off to become a fully independent hedge fund. Presently QSAM operates as a hedge fund owned by the asset management unit of Credit Suisse – the group runs over $1.0 billion, dating back to Credit Suisse’s Systematic Market Making Group (SMG).

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Quant funds are at an interesting juncture presently, with many of these automated strategies failing to catch fire in 2017. A gradual industry push towards more high-speed automated funds and computerized strategies has been handicapped by several external factors, including uneven swings of volatility and a broader push against such trading strategies. As such, many quant funds are experiencing lower returns in 2017, though undoubtedly remain one of the most promising constructs moving forward.

QSAM hedge fund’s buyout is eyeing a Q4 sale for an undisclosed majority stake. The purchase will be spearheaded by QSAM Head and former Credit Suisse veteran Pierre-Yves Morlat. The development caps off a highly successful period for QSAM, which launched less than a year ago in October 2016.

Going independent

Boasting over $800 million in funding at its launch, the group now effectively manages over $1 billion. Originally pioneered through Credit Suisse’s SMG, the trading group’s efforts have resulted in a highly successful fund that has seen its assets and scope grow over the past few months. The SMG had originally been cast as a component of Credit Suisse itself though it is now being moved to the asset management arm.

The sale is not expected to result in a widespread shakeup of personnel. Indeed, Nick Branca, who co-headed SMG with Mr. Morlat and who now runs a separate quant equity fund called QT Fund, will remain part of Credit Suisse asset management.

The sale of QSAM represents one of the largest schisms to date for Credit Suisse with an offshoot of this magnitude being quite uncommon. Following the split, the QSAM team will run the fund out of London with a collective staff of nearly 100 traders based out of Paris, Hong Kong, and Mumbai.

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