QUANT can now boost any firm.

Based on our 20+ years of experience, quant will boost returns and growth at pretty much any investment team or trading desk.

A firm DOES NOT necessarily need to be a quant juggernaut like Two Sigma, RenTech or AQR. Other firms CAN build high-return quant alphas in their investments and trading.

Benefit 1: Alpha returns

To find untapped alpha we can usually try to combine math with insights or data that are unique to our team. Quant can help us analyze data to find these so-called signals. We can then use quant optimization techniques to construct trading strategies and target portfolios.

Benefit 2: More

Quant has a face — and a back. I love the back of quant. The face is predictive statistics and scientific testing, and mathematics. But the back is an equally brilliant side effect. Here's how it happens. Great quants convert a decision process into code. We have to do that. It’s the simplest way to to make our process "systematic" - which is required to have a testable hypothesis. But, by doing that, we develop a skill and habit of converting all our processes — even quite complex ones — into code, which itself requires a particular type of deep analysis and creative work.

So quants make computers do quite complex things. That’s the back of quant, with two sizable benefits: freedom and scale. Freedom, because a computer doing complex work frees us up to play chess and get more ideas. Second, computers scale our work — they do it faster or do more of it with minimal extra effort — which allows our work to generate more benefit - AKA profit.

Either quant can find alpha and trading PnL or quant-style tooling can reduce the Dickensian rote work and hours so common in investing.

Either result multiplies the power of a small team.

Or, we can apply quant-style tooling to simplify research, investment, and portfolio building. Basically, we use engineering and science to reduce the workload of the team, to organize and predict and to take over the rote work that is not ennobling. If they are constantly converting their process into code then they are free to scale those processes or develop creative new ones. Then we free the team to come up with more creative ideas.

Both techniques multiply the productive power of a small team. And quant is now more easily tapped than before.

Why these are available

Tools: Platforms and tools for data and science are now good enough for investments and trading. This is quite recent. Even the quant juggernauts are slowly switching over.

Quants: We’ve found a few great quants and great quant tooling experts willing to trade the perks of a major quant firm for the breadth, mentoring and variety of quant consulting.

The key is to learn the basics so you can create and encourage a new outpost of quant culture.