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Quant Gurus Plan Fund With Academic Edge

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A handful of quantitative trading mavens from the City are launching a Cambridge, U.K.-based hedge fund that will use research and work with staff from Cambridge University.

A handful of quantitative trading mavens from the City are launching a Cambridge, U.K.-based hedge fund that will use research and work with staff from Cambridge University. Ewan Kirk, former partner responsible for quantitative strategy at Goldman Sachs, along with Erich Schlaikjer, former Goldman managing director, and Chris Pugh, previously coo of KBC Alternative Investment Management, are marketing the fund, slated to launch March 1.

Cambridge quantitative finance professor Chris Rogers will also spend two days per week with the fund, dubbed Cantab Capital Partners, and the team has already put together a staff of 11.

Kirk declined to give a target figure for assets under management but said it aims to start small--say around USD100 million--then close while it gets up and running, before marketing to new investors. Cantab Capital will run a macro quantitative strategy across all asset classes so liquidity will not be a problem, he noted. The fund has a wide remit and will make full use of derivatives, both listed and over-the-counter.

Goldman and Barclays Capital are prime brokers to the fund. In what Kirk termed a purely commercial agreement the fund will also use Goldman's pricing models and trading infrastructure. Kirk declined to give further details of the agreement, but he said the partners view the two most important elements of the fund as this technology and the people.

The partners decided to base the fund in Cambridge because of its reputation for investment in high-grade technology and small businesses that has given it the name Silicon Fen and the access to academic brainpower. "It was an article of faith," said Kirk. "Some people said to me that no investors would get on the train and come up and see us." The Cambridge and academic connections, however, have proven a draw to investors and Kirk said Cantab Capital looks set to be oversubscribed for its initial launch. "It's closer to London than Greenwich is to New York, after all," he added.

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