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Quantopian and Hedge Funds

This is all just out of curiosity but... assume I had a four year track record live trading with Quantopian with very good returns. Logistically, would it be possible to run, say, a $200,000,000 hedge fund using Quantopian? Could I start my own hedge fund and use Quantopian to trade investors money?

4 responses

Hi Owen,

The short answer is yes, you can run a fund strategy using Quantopian today (or in 4 years).

I’m comfortable saying yes because we have been trading both internal and external capital every day for nearly 2 years. This includes individuals and small professionals trading their own brokerage accounts, allocations made through the Quantopian Open paper trading competition (totaling about $600k) and more recently through internal proprietary trading accounts.

I’d also encourage you check out the crowd-sourced fund we’re building at Quantopian. We are actively evaluating strategies with as little as 6 months of out of sample real money or paper track record for allocations. If you receive an allocation from Quantopian you license your algorithm to us and get paid a competitive quarterly AUM based performance fee. We think this arrangement is going to be extremely compelling to folks looking to get into the business since it offers a path to fee-based revenue and track record with zero startup costs (legal, operational, registration etc.) for the quant. Would love to hear any feedback you have if you check this option out.

Best, Jess

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Hi Jess,

I recall your mentioning that Q would eventually move to a so-called "prime broker" for its hedge fund. My understanding is that at $200M, Interactive Brokers would not be the best choice. So, would you offer prime broker access to all users? I'm just trying to reconcile my understanding (based on comments from others with experience in the industry), that at a minimum, you'd need a different broker. Also, in general, the Q platform wouldn't seem like a good fit for a $200M fund (but maybe at a lower capital level). What is your largest account?

Grant

Personally Grant I would use IB as my "executing broker" and figure out something with IB to have a different prime broker, one that provides short sellable assets and leverage money.

Jessica

are some users receiving allo's currently?