The Robots Can’t Stop Us Repeating the Mistakes of 2008
A Q&A with Robert Frey, a former managing director at Renaissance Technologies.
New technology, same old mistakes.
Photographer: Chris Ratcliffe/BloombergBig Data, machine learning and artificial intelligence are all being touted as the saviors of active fund managers in their battle with the rise of low-cost passive funds. A veteran of the hedge-fund industry’s efforts to corral quantitative processes into money-making machines is skeptical that the reality will match the hype.
After working at Morgan Stanley in the 1980s and a stint running his own fund, Robert Frey joined the legendary quantitative hedge fund Renaissance Technologies LLC in 1992. Partnering with founder Jim Simons, Frey spent more than a decade there as a managing director helping to build what Bloomberg News in 2016 called “perhaps the world’s greatest moneymaking machine.” The firm’s Medallion Fund generated annualized returns of almost 80 percent a year before fees.