Investment Funds Authority Ildiko Duckor Demystifies Quant Funds and Their Risks

Pillsbury Investment Funds practice co-leader Ildiko Duckor recently spoke with The Hedge Fund Law Report about the strategies and risks inherent in investing in and managing quant funds, which utilize highly sophisticated computer-based models to automate trading activities and are increasingly popular in the “hyper-connected” trading and investment sector. It’s important for managers to be well-versed in the unique operational and marketing challenges that quant funds raise. Duckor started by explaining the basic differences between quant funds and high-frequency trading strategies, distinguishing the risks they each present. “High-frequency trading strategies exploit split-second trading decisions, which can present a much higher market risk … because high volumes are involved, which can move the market quickly and to a large degree,” she said. “High-frequency trading strategies are also more susceptible to potentially…

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