Qube Research & Technologies, the hedge fund that’s kept a low profile since spinning out from Credit Suisse Group AG, is about to hand hundreds of millions of dollars to external money managers who it hopes will boost its multi-strategy investment business.
(Bloomberg) — Qube Research & Technologies, the hedge fund that’s kept a low profile since spinning out from Credit Suisse Group AG, is about to hand hundreds of millions of dollars to external money managers who it hopes will boost its multi-strategy investment business.
London-based Qube has quietly grown into an $11 billion investment operation since going it alone in 2018. It plans to provide capital to 50 money managers by the end of this year, up from about a dozen now, according to people with knowledge of the matter. It typically allocates between $50 million and $100 million to each manager, one of the people said, asking not to be identified because the details are private.
Qube is mainly looking to back external hedge funds running long/short fundamental strategies, which make investments based on company-specific events and financial ratios, the person added.
A spokesman for the investment firm declined to comment.
The push, one of the largest of its kind in the $4 trillion hedge fund industry, coincides with a booming market for multi-strategy investments firms, which have been flooded with capital as investors look to benefit from their steady and diversified sources of returns.
Qube’s approach to outsourcing differs from larger peers such as Millennium Management and Citadel, which mostly employ traders in-house and are engaged in a fierce and expensive battle to hire and retain top investment talent.
The fund is led by Pierre-Yves Morlat, who joined Credit Suisse as head of proprietary arbitrage trading for Europe and Asia in 2009. It was originally staffed with teams from Credit Suisse’s Systematic Market-Making Group that were previously within the investment bank.
Qube was spun out with one fund, $1 billion in assets and about hundred people. The firm currently employs 600 people and runs six funds, two of which are closed to new money. A third is expected to stop taking fresh capital in the next couple of months, once firm-wide assets hit $12 billion, the person said.
It relies on quantitative trading signals to take positions in equities, interest rates, fixed income, relative value, commodities, volatility, currency markets. Two of its largest funds gained more than 20% last year, the person added.
Qube will move capital to external managers in so-called separately managed accounts, a mechanism that gives it transparency and full control over its assets.
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