Quant ice‑age ends as Acadian leads a resurgence in systematic investing

The quant ice‑age is over, and Acadian Asset Management is at the forefront of the comeback.

According to the original report, after an almost two‑year “winter” of poor performance that saw about 85 per cent of quant funds miss their benchmarks in 2018, demand for systematic, factor‑based strategies has surged again as institutional investors and wealth managers seek risk‑controlled approaches that deliver “consistent long‑term returns”.

Acadian’s Australian arm reported its best‑ever inflows for the year to 30 September of roughly A$4.5 billion, Gillian Savage, Acadian Asset Management Australia chief, said. Globally, the Boston‑based quant specialist recorded US$6.4 billion of net client cash flows in the September quarter , which the firm described as the “second‑highest in the firm’s history” , taking assets under management to a record US$166.4 billion as at 30 September. “As a result, we also realized record quarterly management fees of [US]$136.1 million,” Acadian chief Kelly Young said in an October release.

Established in 1986, Acadian has grown from a US base into London, Singapore and Sydney operations. The firm’s revival in the region has been accelerated by institutional re‑allocations: Mercer’s remodelling of its core global equities strategy saw Acadian named as one of three quant managers to take over the roughly NZ$2 billion Mercer New Zealand core global equities portfolio. “We’re managing a multi‑factor portfolio for the Mercer fund,” Savage said. The revamp will also expand Acadian’s footprint across the Tasman, where it already manages Australian equities for Mercer; Mercer rated the Acadian Australian Long Short Fund among the top performers in its category over the 12 months to 31 March.

Industry practitioners stress that the renewed appeal of quant strategies rests as much on risk control as on extracting incremental alpha. Sydney‑based portfolio manager Zhe Chen told the original report that large factor tilts bring elevated risk: “Not all factors work at the same time but we don’t think anyone has a significant ability to time factors,” he said, adding that Acadian maintains “a fairly constant exposure to different factors over time.”

Chen likened Acadian’s approach to fundamental stock analysis amplified by automated, data‑driven processes. The firm’s global equities research universe covers about 43,000 stocks, of which some 12,000–15,000 are typically investable on liquidity grounds, he said , but screening the full universe “validates the model”. The firm has long used machine learning tools; the recent arrival of large‑language models and alternative datasets has broadened the analytical terrain from structured corporate filings into more varied, unstructured real‑world signals. “We’re using three‑times the amount of data compared to just five years ago,” Chen said.

That expansion of inputs and real‑time signal processing has widened the quant playbook and fuelled ongoing research and development. “We’re discovering new factors all the time,” Chen said, underlining the imperative to keep evolving in a global, data‑infused AI quant race.

According to the firm’s market commentary, the inflows were driven by demand for its Enhanced, Extension and Non‑US Equity strategies, illustrating institutional appetite for systematic approaches that can be positioned for both return generation and risk management.

While Acadian’s recent results and institutional wins signal a clear revival for quant investing, the evidence cited here is principally drawn from the firm’s commentary and interviews with its staff. Industry data and investor outcomes will ultimately determine whether the renewed flows translate into sustained outperformance once markets test factor exposures in different economic regimes.