Chapter 203 Athena Fund
The so-called quantitative trading refers to the use of advanced mathematical models to replace human subjective judgments, and the use of computer technology to select various "big stocks" that can bring excess returns from huge historical data. "Probability" events are used to formulate strategies, which greatly reduces the impact of investor sentiment fluctuations and avoids making irrational investment decisions when the market is extremely fanatical or pessimistic.
So generally speaking, the two most important factors for quantitative trading are mathematical models and computer computing power.
The purpose of these experts that Barron hired, and they are famous experts in the field of quantitative trading in their previous lives, is to establish a quantitative trading mathematical model belonging to DS Capital, so as to achieve profit through arbitrage through the model. .
And these people, Barron hired with high salaries that far exceed current Wall Street income-correspondingly, all of them need to sign a strict confidentiality agreement with DS Capital on the day they join the company. , once you breach the contract, you will face high compensation.
In fact, with Barron's current ability, those who betrayed him may have to bear more than just monetary compensation...
After all, for a quantitative trading fund company, the mathematics they use The model will always be the company's top secret, it is their "food guy thing", and it is also the result of the maximum investment of manpower and money.
In the initial stage, these people will go to London to conduct research and application of mathematical models there.
No way, after all, in his previous life, Barron was mostly impressed by quantitative trading funds on Wall Street. As for the leaders of this type of funds in England, compared to their Wall Street counterparts, their popularity It's still a little worse. The one that impressed me the most is CantabCapital, but this company has not yet been established...
This time entering the field of quantitative trading, DS Capital will establish a new private equity fund in addition to the Mars fund, named for the Athena Fund.
Athena is the goddess of wisdom in Greek mythology. The Athena Fund also represents that DS Capital will use the crystallization of human wisdom to apply arbitrage in quantitative trading.
As for the source of funds for the Athena Fund...
When attending a cocktail party with Goldman Sachs before, Anderson, the boss of the Sands Group, and Steve Van Andel, the chairman of the Amway Group The two were very interested in the Mars Fund, a private equity fund under DS Capital.
It’s just that the Mars Fund has closed its investment channel for this year. The next time it opens, it will definitely have to wait until next year.
At that time, Barron gave the two people another option, which was DS Capital’s new fixed income product.
After Barron's introduction, both men became interested.
Because the fixed income product Barron mentioned has an annualized return of only 10%-15%, which is far less than the over 300% return rate achieved by the previous Mars fund in this year.
But the most important thing is that this fixed income fund product can protect your capital!
As we all know, high returns must correspond to high risks.
Therefore, what those investments with extremely large amounts of capital are most concerned about is not the ultra-high rate of return, but the ability to make stable and sustained profits. As for the rate of return, being able to outperform inflation has already made them Very satisfied.
Depending on the funding closing period, from 1 to 10 years, the Athena Fund can provide an annualized rate of return from 10% to 15%, and also guarantees that the principal will not suffer a loss, which is great for large-capital investments. Very attractive.
What Barron introduced to them at that time was the Athena Fund that was to be established.
You must know that the most critical point in conducting quantitative trading is to accurately determine the general market trend of the financial products you invest in through analysis.
As for this, I am afraid that the most confident person in the world is Barron, who has the memory of his past life.
So with his help and increasingly sophisticated mathematical models, the Athena Fund’s average annualized return of less than 50% is considered a failure...
He was fully confident in his promise to protect investors' capital from the very beginning.
As for the rest...
With the success of the Athena Fund and the possible expansion of the amount of funds in the future, the commitment to capital preservation will certainly not continue, and this will not affect investors. enthusiasm. Just like Buffett's Berkshire Hathaway, if you can maintain a stable income of more than 15% for many years, investors will be able to break through the threshold of your company.
So under the guarantee of the capital guarantee agreement, Andersen and Amway Group became the first two investors of the Athena Fund. They will each invest US$50 million into the Athena Fund. middle.
It should be noted that the minimum threshold for Athena fund investment is US$50 million. After all, this fixed-income fund product is designed for large funds.
Because it was the first time to invest in DS Capital’s fund products, Andersen and Amway Group were a little more cautious and only chose the minimum threshold of US$50 million to invest, which also brought a lot of benefits to the Athena Fund. Initial funding of $100 million.
The other is the Kennedy family, who have also brought another amount of capital to the Athena Fund - Boston Public Employees' Retirement Fund (BostonPERS) will contribute US$100 million to this fund.
Whether it is Andelson, Amway Group, or Boston Public Employees Retirement Fund, they have carefully chosen fund products with a one-year closed period, and will receive a fixed income of 10%.
You know, in the United States, general pension funds are required to earn an average return of 6.5%-7.5% per year, but because their investment portfolios often suffer some losses, overall, It is already very rare to achieve this rate of return.
Therefore, if the investment in the Boston Public Employees Retirement Fund can obtain a capital-guaranteed 10% annualized return, as guaranteed by the Athena Fund, then they will definitely be able to obtain more investments similar to mutual funds in the future.
In addition, the Kennedy family also invested US$50 million of their own money into the Athena Fund, which is still closed for one year.
In this way, when the Athena Fund was first established, it received US$250 million in funding.
Of course, this is just the beginning, because in the United States, the Athena Fund has already received US$250 million in funding, so in the UK...
You know, the UK is similar to a pension fund This kind of mutual fund is also huge.
If private equity funds like the Mars Fund are shunned by mutual funds that pursue stable returns because of their relatively high risk, then the Athena Fund, a fund type that provides fixed income and can protect capital, has always been Be welcomed by these sizable mutual funds.
That is to say, the Athena Fund has just been established and has no outstanding record yet, so those mutual funds will not blindly take risks.
But even so, with Barron's network in England, it is not too difficult to obtain part of the mutual fund investment.
When his Athena Fund can make stable profits and get on the right track, I am afraid there will be a huge influx of funds.
According to Barron's arrangement, after the completion of its mathematical model, the current Athena Fund will be led by five fund analysts, including Li Qing, to lead their respective teams, each responsible for US$50 million. funds to carry out quantitative transactions on different financial investment products.
The income of these five groups will be ranked regularly, and the top-ranked group will be able to obtain a larger share of the subsequent funds added.
In addition to the five analysts, the members with outstanding performance among the five groups will also have the ability to form separate groups, thereby obtaining an exclusive share of funds and the qualification to join the competition...
The bonuses of these groups will naturally be linked to their final rate of return. The groups that have always been ranked at the bottom are also at risk of being eliminated eventually.
It can be said that this kind of competition is very cruel, but the financial industry itself is such a place. The income is much higher than that of other industries, but it is not so easy to get.
Under such internal competition, they continued to improve their mathematical models, which ultimately enabled Athena Fund to achieve stable and high profits.
(End of this chapter)