Business Overview

Systematic Investing

Sections:
What we do
Approach
Characteristics
Strategies
Leadership
Insights

Our mission is to identify diversifying hedge fund strategy return streams through a systematic implementation that can offer greater transparency, consistency and liquidity.

What We Do

Contrary to traditional data-mined quant strategies, Magnetar’s Systematic Investing solutions are carefully extracted from decades of active investment expertise, and rooted in practitioners’ insight and proprietary datasets. We aim to extract hedge fund strategy return streams that are consistent across dynamically evolving market environments.

Our Practitioner's Approach

Four key traits serve as the foundation of our practitioners’ insights:

Active Experience
Our team has decades of active investing experience with accumulated insights for asset-class and market cycle nuances.

Proprietary Datasets
Our rules rely on our extensive proprietary datasets, complemented with augmented public data.

Relationships
We have long-standing relationships across the asset management ecosystem.

Infrastructure
Our robust hedge fund infrastructure seeks to optimize risk management and execution.

In practice, applying our practitioners’ insights via a systematic implementation gives us the ability to:

Identify Opportunity
Our practitioners are skilled at identifying markets where we believe one can extract alternative returns by providing risk capital and liquidity.

Efficiently Extract
In codifying our practitioners’ insights into systematic rules, we aim to efficiently extract the source of return for our clients.

Reduce Risk
Our strategy-specific rule sets are structured to reduce the risk of idiosyncratic impairment.

Be Dynamic
Our rule sets are developed to incorporate flexibility and dynamic leverage across changing opportunity sets.

Strategy Characteristics

Our approach enables us to engineer systematic processes to extract return streams that are consistent across dynamically evolving market environments. These traits are underpinned by a shared set of characteristics.

Strong Diversification

Low intra- and intercorrelation to other asset classes and within our strategy suite.

Intuitive

Rule sets are transparent and derived from intuitive fundamental decision points, not by academics operating in a vacuum.

Rational Origination

We focus on developing systematic rule sets where the sources of return often originate from risk capital imbalances, market structure or investor segmentation.

Efficient Extraction

We continuously strive to refine our trading infrastructure to optimize implementation for efficient return stream extraction.

Our current strategies

Systematic Risk Arb
Systematic Convertible Arb
Equity Statistical Arb

Systematic Risk Arb

Our Systematic Risk Arbitrage strategy – also known as “Merger Arbitrage” – was established under the premise that this type of investing may offer excess returns that can be isolated based on certain M&A deal characteristics, including geography, market capitalization, and transaction and deal type.

We believe that by systematizing this strategy to refine deal selection and to manage strategy risk, we may be able to harness the associated premia more effectively.

Systematic Convertible Arb

Our Systematic Convertible Arbitrage strategy seeks to buy “long” a convertible security and sell “short” a portion of the underlying stock into which the convertible security may be exercised, in instances where our models measure the security to be theoretically cheap and relatively mispriced. The strategy may also seek to hedge a portion of the interest rate risk.

Equity Statistical Arb

Our Equity Statistical Arbitrage strategy seeks to capture liquidity risk premia typically associated with the tendency for equity prices to revert to the mean from short-term dislocations that may not be associated with a change in fundamentals. Mean reversion strategies typically look to monetize opportunities created by short-term market overreactions.