Tudor Jones backs AI hedge funds

Hedge fund magnate Paul Tudor Jones has invested in a brace of artificial-intelligence powered “quantitative” hedge funds, underscoring the increasing acceptance that the industry will need to turn more to technology and away from traditional human traders.

The billionaire investor has invested in CargoMetrics, a Boston-based fund backed by Google chairman Eric Schmidt that crunches global shipping data and satellite images to find tradeable patterns, and Numerai, a West Coast “crowdsourced” hedge fund backed by former Renaissance Technologies co-founder Howard Morgan, according to people familiar with the matter. CargoMetrics, Numerai and Mr Tudor Jones’ $10bn Tudor Investment Corporation all declined to comment.

In 2015 the hedge fund manager told his team that “no man is better than a machine, and no machine is better than a man with a machine”, according to a person familiar with the matter. Interest in systematic, algorithmic investing has exploded in recent years, while the appetite for — and performance of — more traditional mutual and hedge funds has waned. The potential for artificial intelligence fields like machine learning to unearth tradable signals in digital data produced around the world has generated particular interest over the past two years.

Mr Tudor Jones has in recent years gone on a hiring spree for mathematicians, programmers and data scientists to turn Tudor into what some analysts term a “quantamental” firm, one that marries quantitative strategies with traditional fundamental analysis. This is the future of investing, according to Savita Subramanian, an analyst at Bank of America Merrill Lynch.

Source: Financial Times

Trader Nikolay Georgiev