Thomson Reuters Highfields Capital Management, a $13 billion hedge fund, has raised concerns about quant funds and passive investing in a letter to clients seen by Business Insider. Quants use algorithms to make investment bets while passive funds track market indices. Both are challenging active managers, the human-backed stock pickers that have traditionally dominated Wall Street. Quants in particular could worsen the next financial crisis, according to Highfields, an active manager. A $13 billion hedge fund that flies under the radar is sounding the alarm on one of the biggest investment trends – quants and passive investing. Highfields Capital Management flagged concerns about computer-driven trading in its second-quarter letter to investors this week, a copy of which was reviewed by Business Insider. Boston-based Highfields uses a fundamental, value investing strategy, and though it is one of the biggest hedge funds, doesn't often get much attention. Quants could effectively worsen the next financial crisis, Highfields' founder Jonathon S.
Comment on A $13 billion hedge fund is sounding the alarm on one of the biggest trends in investing
rlevy@businessinsider.com (Rachael Levy), Business Insider
Tue, 07/25/2017 - 9:44am
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