Beyond replication, HCM harvests the alpha in the algos
Mon Mar 5, 2012
FRM alumni explore algorithms to offer institutional investors a cheaper option
By Claire Makin
For HCM co-founder Guy Hurley, algorithms can be beautiful
things, able to capture complex trading opportunities in ways
that were undreamt of a decade ago. They are also proliferating
at incredible speed, and may be about to change the alternative
investment landscape in the same way that index tracking
transformed traditional investing in the 1990s.
Hurley and the small team at London-based advisory boutique
HCM aim to be at the leading edge of this trend. They oversee a
diversified portfolio of up to 35 liquid, algorithm-based
trading strategies, which are sold in index form by big
investment banks. The concept is similar to a multi-strategy
fund of traders, but instead of underlying traders, HCM focuses
on the new 'alternative beta' indices and the trading
algorithms that drive their returns.
"What it means is that we are able to create just about any
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