SUHAIMI ZAINUL-ABIDIN: NEXT-GENERATION FUND MANAGER

The CEO of fund manager Quantedge Capital shares the firm’s strategies to gain an edge in the investment management world.

Suhaimi Zainul-Abidin may have started his professional life as a lawyer, but he now spends most of his waking hours watching markets, speaking to investors, and growing the Quantedge brand. Quantedge was incepted in 2006 with just under USD3 million under management, but the quantitative investment manager’s assets under management have grown almost a thousand-fold since.

BiZQ speaks with Suhaimi on Quantedge’s growth plans and talent management strategies, and how the firm leverages on technology to stay ahead.

What attracted you to the investment management industry?

I began my career as a lawyer in the financial services department of Allen & Gledhill LLP in 2004 and spent almost a decade at the firm. It was both a fulfilling and challenging experience which moulded me as a working professional. Even as a lawyer, I had always been intrigued by the investment world. I followed stock markets and dabbled in start-up investments. Prior to becoming an employee at Quantedge, I had also invested in Quantedge Global Fund.

The financial world is more interesting than I had previously imagined. In the past 12 months, we have seen negative oil prices, the phenomena of meme stocks, the rise of cryptocurrencies, and the deFi movement. It is a highly complex and ever-changing landscape, making it a fascinating space to be in.

What is Quantedge’s growth strategy?

Quantedge is fairly well known to institutional and accredited investors in Singapore. We started off as one of the first local quant funds in Singapore and are now one of the biggest local independent hedge fund management firms in Singapore.

The world is so interconnected today that investors can invest in funds managed in Singapore just as easily as those managed in overseas markets such as Hong Kong, Shanghai, New York, London, or Sydney. The challenge is to build a business and brand name that has international recognition and reach, not just in Singapore.

For us, it all begins with performance. The priority at Quantedge has always been to run a robust investment portfolio capable of delivering meaningful compounded returns over the long term. The performance of our Fund has, over the years, garnered international recognition, including Best Asian Billion Dollar Hedge Fund by EurekaHedge, second in Bloomberg’s Top Large Hedge Funds, and second in Barron’s Best 100 Hedge Funds. While we do not set out to win such awards, the international recognition enhances our credibility.

Investment performance remains the biggest driver of growth for the firm. First and foremost, we want to provide good investment returns to our existing investors. Concurrently, we also invest heavily to build business robustness. This includes developing the depth and quality of our investment research team, improving our IT systems and security, and upholding high investor service standards. Investors are drawn to the whole package and not just investment returns. With these elements in place, satisfied clients will tell their friends about Quantedge and that is how we have grown over the years.

What are some of the biggest trends facing the industry today?

ESG (environment, social and governance), digital assets and A.I. (artificial intelligence) are the three most significant trends in investment management today. There are also incidents in the financial markets that can rattle investors from time to time. Recent examples include oil futures going negative, and the implosion of Greensill Capital and the Archegos family office. These incidents often lead to anxious queries from investors who want to know if our business is affected and if we are exposed to similar risks.

We are constantly adapting to changes. Although we run a single systematic quantitative investment portfolio based on the same investment philosophy as we had since day one, the underlying investment models and the portfolio has evolved over the years. For instance, we began researching on ESG parameters and their effects on our equities portfolio last year and, shortly thereafter, incorporated ESG parameters into our equity styles strategies.

We are generally intellectually curious about all manner of things. We are always considering new data sets, new asset classes and markets, and new ways of organising and analysing data.

How does Quantedge attract and retain talent, and what are some industry skills that are in high demand?

We are very deliberate in our hiring. We advertised for quantitative research analyst roles in 2018 and sieved through thousands of quality CVs to make 30 internship offers, which we then whittled down to 12 full-time hires. We have hired graduates for quantitative research and trading roles from a wide range of fields, including economics, mathematics, computer science, engineering, and the sciences.

When we hire, we consider not only intellectual and quantitative abilities, but also personality and fit. We also expend considerable resources to train our staff.

At Quantedge, we believe that we have a unique collaborative culture that needs constant nurturing. We now have 69 staff working in our Singapore and New York offices, and over the last 14 years, we have only had three staff leave the firm, and none have left for a competitor.

How is technology changing the investment management industry?

Data and analytics have always been important in the investment management industry. Even decades ago, when computing power was limited and processes were largely manual, the managers with better information and better insights tended to prevail.

Quantedge, being a systematic and quantitative fund, has always embraced technology in all aspects of investment management, ranging from investment research, portfolio management, trade execution, fund accounting to investor management. For example, in the field of investment research, we utilise technology to manage data, perform quantitative analysis and track performance.

In general, we are always looking for ways to improve our investment management processes. We make small improvements all the time. When it comes to technological experimentation and adoption, to stand still is to fall behind.