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Asset Allocation

Study: Lack of Understanding Between Quants and Managers

New study shows quants feel misunderstood in their roles at global financial firms.

(November 5, 2009) – A new study of quants and risk management supervisors indicates that there is a large gap in understanding between the two groups.


The study, done for The Certificate in Quantitative Finance—the brainchild of noted quant Paul Wilmott—shows that 86% of quants feel that supervisors have learned little during the financial crisis. A further 64% feel that their supervisors have little to no understanding of what a quant does. Even more alarming is that 70% feel that the level of understanding of their role has decreased (or at least not changed) since one year ago.

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Although a difficult group to define, quants usually work for financial institutions in the areas of quantitative finance and risk management.  


Wilmott—who will appear in the December issue of ai5000—indicated his concern regarding the results in a press release. “These numbers are alarming,” he is quoted as saying. “They indicate that, even with the events of the past year, financial institutions are still not taking the importance of financial education seriously, especially as it pertains to improving relationships and understanding between quants and their managers.”



To contact the <em>aiCIO</em> editor of this story: Kristopher McDaniel at <a href='mailto:kmcdaniel@assetinternational.com'>kmcdaniel@assetinternational.com</a>
Home > News > Newsmakers > Banker: SWFs To Go Heavy on Commodities, Emerging Markets
Newsmakers

Banker: SWFs To Go Heavy on Commodities, Emerging Markets

 

After 2008, when they were burned by financials, SWFs are likely to stick with a recent trend toward natural resources.

 

(November 5, 2009) – A senior Barclays banker is predicting that sovereign wealth funds (SWFs) will focus on commodities and emerging markets in 2010.

 


Gay Huey Evans, Vice Chairman for Investment Banking at Barclays, told Reuters that, following a year when the majority of the $94 billion invested by SWFs was put into commodities, he expects 2010 investments to flow to both natural resources and emerging markets. According to the banker, 61% of investments in 2009 have been put in natural resources and just 15% in financials. This is in stark opposition to 2008, when the figures were 8% and 48%, respectively.

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He also noted that such investors will be more cautious going forward.

 


“People are going back into the market, but they are going back quietly, gently, thoughtfully, not with a bang,” Evans told Reuters. “Political pressure was certainly as strong as the real market performance in causing sovereign funds to reshape and rethink their overall investment strategy.”

 


One likely drawback of these actions is suspicion from the West that Asian funds are attempting to corner resource markets for their growing population. China, however, has openly stated that this is not the goal, instead citing financial return motives.



To contact the <em>aiCIO</em> editor of this story: Kristopher McDaniel at <a href='mailto:kmcdaniel@assetinternational.com'>kmcdaniel@assetinternational.com</a>

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