Goldman's Quant Unit Rebuilt on Lessons Learned in 2007 Meltdown
- Quants use less leverage, more factors aiming for consistency
- Assets climb to $110 billion in smart-beta, big-data offerings
Goldman Sachs Group headquarters in New York.
Photographer: Ron Antonelli/BloombergThis article is for subscribers only.
Ten years ago, an abrupt meltdown in quantitative equity funds worldwide shook the burgeoning industry, spurring an exodus of investors. Goldman Sachs Group Inc. was among the worst hit, shedding three-quarters of its $165 billion in quant investments by 2012.
Gary Chropuvka, one of two partners leading the Quantitative Investment Strategies team at Goldman in New York, sweated those hot August days in 2007 that he says he’ll never forget. Rather than losing faith in quant investing, the group began to rebuild the strategies with less leverage and more diversity.