Man Group, Bridgwater, Schonfeld explain quantamental and how it works - Business Insider

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Building Terminators: Massive hedge funds like Man Group, Bridgewater, and Schonfeld lay out their vision of the right 'quantamental' mix of humans and machines

to "supercharge" the work already happening at the hedge fund leveraging quant data in the discretionary world.

That's followed by portfolio construction, which is then given a final look by the portfolio managers to make the last tweaks. Adjustments made by humans to the model are tracked and analyzed to recognize commonalities that could be plugged back into the model to improve it. "What you end up with are very differentiated signals, very differentiated approach," he added. "You're using the power of quant and the techniques of breadth, portfolio construction, and risk management to build the best portfolio. But what you get is a portfolio that acts very differently than a lot of other portfolios."

"The most brutal feedback I ever got from a prospective client was, 'Using your platform would be an admission of failure to my investors,'" he said. "Nobody likes to be put in a room and told to collaborate," Man Group GLG's Chambers said. "What you need to do is find a way for both sides to get something out of the process. ... Quants can't be seen as service providers."For one, quants tend to take a build-over-buy approach, believing proprietary tech to be a key differentiator.

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