Interview, Fireside Chat
Leda Braga, CEO of Systematica Investments
- The firm anticipates facing challenges comparable to a recent difficult five-year industry period within approximately two years, acknowledging market difficulty as a universal narrative for hedge fund managers.
- Investment management is predicted to converge toward quantitative approaches, with discretionary traders expected to increasingly adopt quant methodologies.
- Strategies historically managed by discretionary traders, including macro-relative value and volatility arbitrage, will be systematized to facilitate objective measurement of transaction costs, crowding levels, and market participation.
- Trend following strategies are expected to remain the optimal risk-mitigating option for pension funds despite recent performance issues, with machine learning planned to measure trend signals, reduce dimensionality, and address challenges in harvesting consistent returns.
- The role description will shift from "risk-seeking" to "capital committing" to improve female participation, although the 24-7 nature of certain markets is acknowledged as a continuing structural barrier to flexibility.
- Succession planning aims to establish an enterprise capable of surviving the founders to continue serving clients and providing career opportunities, with a specific goal for the business to operate effectively without direct founder involvement.
- Product offerings will continue to diversify based on client feedback to adapt and serve client needs in the coming period.
- Machine learning techniques will be utilized to better understand relationships between trend indicators and forecast returns, group assets differently prior to processing trends, and improve Sharpe ratios.
- The firm's culture of welcoming diversity is expected to persist, allowing colleagues to act differently and suggest initiatives, including religious observances such as office fasting for Ramadan.
- The business will continue to operate with humility, recognizing that investor dissatisfaction ("crowd at home rebellion") poses a significant risk to the firm's future.