WorldQuant, LLC is an international

hedge fund A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as sho ...

and

quantitative investment Quantitative analysis is the use of mathematical and statistical methods in finance and investment management. Those working in the field are quantitative analysts (quants). Quants tend to specialize in specific areas which may include derivative s ...

management firm headquartered in

Old Greenwich, Connecticut Old Greenwich is an affluent coastal village in Fairfield County, Connecticut, United States. As of the 2010 census it had a population of 6,611. The town of Greenwich is one political and taxing body, but consists of several distinct section ...

. Founded in 2007, the firm is currently

managing Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activities o ...

approximately $9 billion in assets under management for

Millennium Management Millennium Management is an investment management firm with a multistrategy hedge fund offering. It is one of the world's largest alternative asset management firms with over $50 billion assets under management. The firm operates in America, Eur ...

via

quantitative trading Mathematical finance, also known as quantitative finance and financial mathematics, is a field of applied mathematics, concerned with mathematical modeling of financial markets. In general, there exist two separate branches of finance that require ...

and other methods of

quantitative investing Quantitative analysis is the use of mathematical and statistical methods in finance and investment management. Those working in the field are quantitative analysts (quants). Quants tend to specialize in specific areas which may include derivative s ...

. WorldQuant operated the WorldQuant Challenge, where participants compete in the field of quantitative finance, and WorldQuant Accelerator, an independent

portfolio manager A portfolio manager (PM) is a professional responsible for making investment decisions and carrying out investment activities on behalf of vested individuals or institutions. Clients invest their money into the PM's investment policy for future grow ...

platform. In 2015 the WorldQuant Foundation launched WorldQuant University.

History

Millennium spinoff

WorldQuant, LLC was founded in 2007 as a quantitative investment management firm spun out of

New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...

. Prior to forming WorldQuant, its Belarus-born founder

Igor Tulchinsky Igor Tulchinsky is an investor, entrepreneur, venture capitalist, author and philanthropist. He is the founder, chairman and CEO of WorldQuant, a global quantitative asset management firm with over $7 billion in assets under management that he fou ...

(* 1966) had worked at Millennium as a portfolio manager since 1995. With a focus on

statistical arbitrage In finance, statistical arbitrage (often abbreviated as ''Stat Arb'' or ''StatArb'') is a class of short-term financial trading strategies that employ mean reversion models involving broadly diversified portfolios of securities (hundreds to thousan ...

, Tulchinsky's team of researchers and quantitative traders joined him at WorldQuant. The new fund continued to use Millennium's corporate infrastructure and

trading platform In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products c ...

Early history and recent developments

By 2014, WorldQuant had officially launched the WorldQuant Challenge, with around 30,000 people taking part by May 2016. The year-round competition allowed contestants to use WorldQuant's WebSim platform, an online "financial market simulation tool", to create their own algorithms, or "Alphas", in an effort to predict behavior in the stock market. The challenge resulted in 7,000 active users on the WebSim platform by March 2017, with 450 of those users hired as part-time research consultants through WorldQuant's Research Consultant program. By April 2015, WorldQuant had 400 employees responsible for managing $4 billion of Millennium's funds, equating to approximately 15% of Millennium's total AUM. WorldQuant's business model continued to rely on data analysis to predict stock market behavior, with researchers analyzing "thousands of

data set A data set (or dataset) is a collection of data. In the case of tabular data, a data set corresponds to one or more database tables, where every column of a table represents a particular variable, and each row corresponds to a given record of the ...

s to create so-called trading signals." Explains the ''Wall Street Journal,'' "A separate team focused on portfolio construction and management sorts through and combines he trading signals turning them into models. Many such models, which recontinuously adjusted,

ake Ake (or Aké in Spanish orthography) is an archaeological site of the pre-Columbian Maya civilization. It's located in the municipality of Tixkokob, in the Mexican state of Yucatán; 40 km (25 mi) east of Mérida, Yucatán. The name ...

up a fund." By May 2016, WorldQuant had 18 offices with 450 professionals working as researchers, portfolio managers, and technologists. In February 2017 WorldQuant announced the launch of WorldQuant Accelerator, an independent

platform to compete with other open source trading platforms, mainly Numerai, Crunchdao, QuantConnect & Quantopian. At the time of its launch the new platform had 15 independent teams, with plans outlined to double that number over the next two years. The new platform allowed WorldQuant's independent portfolio managers to access WorldQuant technology such as back-testing technologies and impact modeling. The platform also allowed managers to retain the rights to their algorithms, a detail that ''Bloomberg'' said was "rare in the industry" and "could help WorldQuant compete for the top minds." The platform is no longer active. By April 2017, WorldQuant managed more than $5 billion for Millennium Management. Although WorldQuant has never published performance numbers publicly, the ''Wall Street Journal'' reported in 2017 that the firm had "never had a down year." In 2022 WorldQuant initiated Global Alphathon, an international competition where quants build and submit alphas using WorldQuant’s BRAIN platform.

Offices and employees

With headquarters in

, WorldQuant has more than 20 offices worldwide. By April 2017 WorldQuant had more than 500 employees, as well as 450 paid research consultants. 125 full-time employees were "PhDs scouring everywhere for recurring patterns that might boost returns," working as researchers or in other positions. The year prior, WorldQuant had settled out of court on a

breach of contract Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party ...

suit concerning a former head of its data strategies. By November 2018, the company had 700 employees. In May 2020, Gary Chropuvka was appointed as president by WorldQuant.

Services and business model

WorldQuant LLC is a

and a quantitative

investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...

firm, providing related services such as portfolio management,

market research Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mark ...

, and

trading Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct exchan ...

. Described by the ''

Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...

'' as "part of the forefront of a new quantitative renaissance in investing", the firm has a "computational" approach to its

that utilizes " data mining, statistical methods and

artificial intelligence Artificial intelligence (AI) is intelligence—perceiving, synthesizing, and inferring information—demonstrated by machines, as opposed to intelligence displayed by animals and humans. Example tasks in which this is done include speech re ...

Deep learning Deep learning (also known as deep structured learning) is part of a broader family of machine learning methods based on artificial neural networks with representation learning. Learning can be supervised, semi-supervised or unsupervised. De ...

and artificial intelligence are used as tools to help with small-scale trading. According to ''Bloomberg'' on March 16, 2017, "WorldQuant claims to look at thousands of new information sources a year, no matter how exotic. From those, it's built a library of 4 million 'alphas', or pieces of predictive code that tell the computer to buy or sell. Some may be simple, others may be attempts to take advantage of market anomalies. Portfolio managers then construct strategies by using the alphas as building blocks, depending on which the current market environment favors, swapping out ones that may have lost their edge." By April 2017 the company had analyzed new data sets, including items varying from shipping statistics to credit card receipts to parking lot traffic to market pricing data, creating and compiling 4 million alphas in a central repository called the "Alpha Factory". WorldQuant's online platform called WebSim allows its paid consultants to add algorithms to the repository. Other divisions within WorldQuant then combine the alphas into strategies, which are then turned "into bigger portfolios", largely related to stocks.

Related enterprises

WorldQuant University

In 2015 the WorldQuant Foundation launched WorldQuant University, a free online master's degree program in financial engineering.

WorldQuant Ventures

In late 2014 Tulchinsky founded WorldQuant Ventures. Organized separately from WorldQuant as Tulchinsky's own angel investment fund, the firm's focus is on data and finance companies in "everything from

water management Water resources are natural resources of water that are potentially useful for humans, for example as a source of drinking water supply or irrigation water. 97% of the water on the Earth is salt water and only three percent is fresh water; slightl ...

." 2016 investments included

Cycle Computing Cycle Computing is a company that provides software for orchestrating computing and storage resources in cloud environments. The flagship product is CycleCloud, which supports Amazon Web Services, Google Compute Engine, Microsoft Azure, and intern ...

, Benzinga, and untapt, while 2017 investments included the

Canadian Canadians (french: Canadiens) are people identified with the country of Canada. This connection may be residential, legal, historical or cultural. For most Canadians, many (or all) of these connections exist and are collectively the source of ...

research company Canalyst. In December 2021 WorldQuant Ventures invested in AngelList's Early Stage Quant Fund.

References

{{reflist

External links

WorldQuant.com

WorldQuant.co
Hedge funds Financial services companies established in 2007 American companies established in 2007 Alternative investment management companies Hedge fund firms in Connecticut Hedge fund firms in New York City Venture capital firms of the United States