Former AQR, Blackrock quant talent to launch new A share quant fund from Shanghai
Dr. Xin Zhou, a highly-skilled quant portfolio manager who worked before at both BlackRock (legacy Barclays Global Investors) and AQR for more than eight years, has decided to strike on her own with the goal of establishing a new quant fund focused on China’s A shares.
Zhou, a former resident of Greenwich, Connecticut, a small town that hosts many of the world’s renowned hedge funds such as AQR, BridgeWater and Tudor, relocated to Shanghai last year to help the Chinese conglomerate WanXiang build up its financial data and quantitative investing platform DataYes.
After DataYes, she has decided to move on and launch her own hedge fund that employs the same quantitative investing techniques applied by her former employers, but this time focused on China’s market.
Zhou will set up her investment firm, XY Investments, in the Shanghai Free Trade Zone, where Chinese and foreign institutional clients and high net- worth individuals can access all types of investments. Her investment style, a quant strategy that focuses on fundamental financial information with a macro overlay, is heavily influenced by her mentor Dr. Richard Sloan, an academic guru and the former head of equity research at BGI.
Her strategy went live this year and has already delivered a remarkably robust 39% returns to starkly outperform the MSCI China which has only gained 7.60% in the first eight months. The size of the strategy has steadily grown and is expected to reach several hundred million of RMBs by the end of the year.
Zhou says the strategy adopted a conservative stance investing the money given that her clients are mostly insurance firms that are “extremely risk sensitive”.
Zhou said that there has been a strong interests in the China market for quant products.
While she has not been actively marketing the fund to outside investors, several firms including both traditional insurance companies as well as newly started FOF businesses have already reached out to her for potential fund management service.
Her firm also hopes to attract commitments from other mainland investors who might also be interested in accessing U.S. and European stocks which she hopes to start trading next year given her extensive working experiences at BlackRock and AQR.
Zhou was born in China and received her PhD in Accounting and Finance from Tulane University’s A.B. Freeman School of Business. After spending fifteen years studying and working in the U.S., she decided to return last year together with her husband, Tony Tang, a finance PhD from Chicago Booth Business School, and a former quantitative global macro portfolio manager at AQR and BGI.
Both were attracted by the increasing investment opportunities in China and decided to leave their already well-compensated careers in the U.S. Tang currently works as a chief asset allocation officer at a Chinese asset management firm in Shanghai.
AQR is considered one of the most successful quant hedge funds in the world and manages over $100 billion in assets.
BlackRock is the largest asset manager in the world with an AUM exceeding $4 trillion.