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Computer-powered hedge fund group AQR Capital Management is to remove five partners from its ranks and trim its bond arm, continuing to retrench operations after several lean years for many systematic trading strategies.
The $137bn investment group led by Clifford Asness has been a pioneer of ‘quantitative’ investment strategies that attempt to profit from long-term market signals, rather than traditional human traders and fund managers.
AQR’s assets under management peaked at $226bn in mid-2018, but since then many of the main strategies it uses have fizzled, deflating its size and leading to several rounds of job cuts at the Greenwich, Connecticut-based hedge fund manager.
On Thursday, the firm announced internally that five of its top executives would be leaving and its bond investing side reorganised, with its struggling “long-only” fixed income arm started in 2014 being shuttered altogether, according to people familiar with the matter.
AQR declined to comment on the moves, but Suzanne Escousse, a partner at the firm, said in a statement: “We remain committed to systematically trading fixed income in our long-short, alternative and risk parity strategies as we have done since AQR’s inception.”
The five “principals” were Michael Katz, head of portfolio implementation; Michael Patchen, head of risk; senior researcher Ari Levine; Scott Richardson, co-head of fixed income research; and Chris Palazzolo, AQR’s head of responsible investments, according to people familiar with the matter. The exits will leave 38 principals at the firm.
Read more on the cuts at AQR here.