You remember Spencer Greenberg, Jeremy Newton, Jonathan Sturges, and Alexander Fleiss.The Wall Street Journal ran a huge profile of the four 20-something quants, who started a hedge fund right out of college, on the cover of the Money & Investing section this summer.
At the time, they had around $7 million under management and their returns weren’t bad:
- +17% in 2007
- -26% in 2008
- +41% in 2009
And now, their AUM is up to $11 million and they just came off a strong year in 2010, returning 20%, according to an investor who asked us not to name him.
Compare that to the 21 best hedge fund returns of 2010 in HSBC’s recent report and they’re right up there. (You can’t really compare them; the hedge funds on the list have significantly higher AUM.)
Of course, those returns belong as much to the four as they do to “Star,” the men’s nickname for the algorithmic system Rebellion uses.
“Star” works by recommending a list of stocks every morning, although sometimes there are no stocks on the list. Then a human trader implements the moves (the firm never overrules Star).
Here’s a simpler explanation. Spencer Greenberg says Star works like a really smart elevator.
“The elevator might record all of the history about everyone who’s rang for it, what time of day, what day of the week, what floor, and so forth. And it would automatically infer the optimal place for it to be at every point in time during the day.”
To read more about the four, click here >