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Billions Going to China’s Quants Takes Fight to Global Funds

  • A mix of machine learning and local knowledge is paying off
  • One of Zhejiang High-Flyer’s products returned 99% last year

Photographer: Johannes Eisele/AFP via Getty Images

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As China was welcoming in the world’s largest hedge funds four years ago, a Hangzhou-based quantitative fund was burning through motherboards and buying the wrong types of servers as it figured out machine learning.

Those “silly mistakes” quickly made way for Zhejiang High-Flyer Asset Management’s integration of machine learning into the strategies it uses to invest its 20 billion yuan ($2.8 billion) in assets, said Chief Executive Simon Lu. It now boasts its own super computer, a 60-strong team of engineers and data scientists and a confidence that belies its five years in the business.