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Hedge Fund Alert - June 3, 2015

Schonfeld-Backed Shop Hunts for Quant Pros

Quantbot Technologies, which runs money exclusively for Steven Schonfeld's family office, is on a hiring drive.

The $1.5 billion firm plans to add 3-5 quantitative researchers and strategists to its roster each year going forward. It already has more than 20 investment professionals on staff.

Quantbot especially is seeking recruits with entrepreneurial aspirations, with plans to assign them to develop and run their own investment programs. The staffers would be able to take their track records with them when they leave. "We think it opens up a huge opportunity for quant researchers to change the direction of their careers." said Andrew Fishman, president of family office Schonfeld Group.

Quantbot mainly employs statistical-arbitrage strategies, but is moving into other areas including electronic futures trading. The firm's growth effort reflects an agreement early this year to extend its relationship with Schonfeld Group by more than 10 years.

Quantbot, founded in 2009, is led by Mike Botlo, Michael Lisak, Ashar Mahboob and Paul White. The group previously built an electronic-trading business for Morgan Stanley's proprietary-trading desk, but left as the bank pared back on such activities amid the financial crisis. Earlier, they started a similar business at Merrill Lynch.

Proprietary traders have flocked from banks to firms like Schonfeld Group since the market crash. Now, Quantbot is targeting hedge fund professionals as well. The belief is that many quantitative specialists at hedge funds are frustrated over getting pigeonholed as data gatherers, analysts, traders or software developers - roles that give them less oversight than portfolio managers and often don't come with "portable" track records.

Quantbot is based in New York, and maintains a London office. The firm also opened a Hong Kong outpost in December to supply operational and technical support to its staff. It now is looking at possible locations elsewhere in Asia, along with North America, Europe and Africa.

Schonfeld Group was launched in 1988 as a proprietary trading shop. Today, it calls itself a family office while deploying capital across a multitude of strategies.

The best-known manager to start his career at Schonfeld was Dmitry Balyasny, who joined the firm in 1994. He left to launch Chicago-based Balyasny Asset Management in 2001.