Jean-Marc Bonnefous: Quantamental strategies are interesting but also challenging
I am running a UK investment management firm regulated by the FCA called Tellurian Capital which has been managing commodity hedge fund strategies since 2007 and has pivoted to digital assets in 2019.
Jean-Marc will be set to speak at Quant Strats at 2.30 pm PANEL: Leveraging quant techniques in non-equities - finding the competitive advantage. The panel discussion will take place on the 24th of October at The Park Plaza Victoria, London. You can find out more information about it by downloading our agenda!
1. What do you consider your biggest professional achievement to date?
I like to be early in new innovative markets. I closed some of the very first commodity derivatives transactions in the 1990s and am now one of the first regulated investment managers delivering quantitative crypto strategies to institutional investors in 2020. Next, we are investigating how we can include AI-based explainability in some of these digital asset strategies.
2. What has been your /your firm’s top 3 priorities for the coming year?
1. Ensuring that our business and the funds we manage are equipped with the proper credit and risk management frameworks to navigate the complex and volatile crypto markets
2. Expanding the range of active strategies we offer to investors
3. Scaling our fund size and assets.
3. What do you think are the biggest challenges facing data scientists/AI experts/quantitative practitioners for 2023 and beyond?
Explainability of our quantitative methods and sustainability of results.
4. Market and political uncertainty over the last year has seen unpredictable outcomes for some quant firms – how do you think quant firms can prepare for increased uncertainty to come and manage the 40-year inflation high that was seen in 2022?
By continuously reviewing their algos and methods to the present market regime and ensure the mthodology stays adaptatove and dynamic.
5. ChatGPT is everywhere and being used everywhere. How do you see quant funds using this new technology and what advice can you give people using it?
This is an interesting new tool, however the issue of is explainability and transparency of these tools; to be handled with care...
6. Are you seeing quant investing being used in new geographies/where are you expecting some interesting quant stories to be emerging from?
The most recent interest for quantotative crypto strategies seems to come from Asia, more than the US, a new development.
7. At Quant Strats, we always discuss the challenges nad opportunities of blending quant and fundamental strategies and this is always a popular topic – why do you think this is? What do you think is the most important questions for quants when considering this strategy?
Quantamental strategies are interesting but also challenging for the investors as there is a certain lack of clarity on the replicability and transparency of such such strategies.
8. To what extent do you see the use of blockchain/crypto integrating into capital markets? As crypto is becoming more mainstream, how have hedge funds responded and what could be the potential impact on capital markets?
As soon as crypto market regulation is clarified in the US and there is more explainability available for quantitative crypto investment strategies, we expact the insitutional investors to increase their allocations to digital assets; this could be 12-18 month away.
9. What are your predictions for quant investing in crypto?
There will be an increse in uptake of directional active strategy with higher vaolatility than the marjet neutral strategies with low vol but also low returns, as the hurdle ratres for crypto strartfies need to adpa with en environment with higher risk free rates.
Don't miss Jean-Marc's panel at Quant Strats!