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BlackRock cuts ranks of stockpicking fund managers (FT)

This was sent over by a member so thanks for them sending: (source is FT)

BlackRock cuts ranks of stockpicking fund managers Quant investment strategies to take the place of out-of-favour active managers Read next FTfm Stephen Foley BlackRock’s active funds navigate rough seas © Bloomberg Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 64 Print this page March 28, 2017 by: Stephen Foley in New York BlackRock has fired several prominent stockpicking fund managers and plans to switch their funds to quantitative investment strategies, in what chief executive Larry Fink called a “pivot” away from areas of active management that have fallen out of favour. The company on Tuesday said it was introducing sweeping changes across its troubled actively managed equities funds, in a new example of the upheaval being wrought across the asset management industry by an investor shift towards lower cost passive funds. About 40 staff are being laid off, including seven portfolio managers, according to people familiar with the details of the plan. BlackRock is the world’s largest asset manager, with more than $5tn in assets under management. But $20bn flowed out of its actively managed equities business last year. Across the industry, funds whose managers use traditional fundamental investment research to try to pick winning stocks in highly liquid and efficient markets such as the US have consistently been shown to lag behind cheap index-tracker funds, and have suffered accelerating outflows. By switching dozens of large funds to new strategies that he hopes will prove more popular, Mr Fink is trying to signal to BlackRock’s shareholders that the company has more options than smaller fund groups who specialise only in active equity management. BlackRock “embraces change and turns it into an opportunity”, he said. “We are constantly anticipating how macro trends will reshape both our industry and our clients’ needs. We then pivot accordingly.” The shake-up is the result of a six-month review led by Mark Wiseman, who was poached by Mr Fink last year from the Canada Pension Plan Investment Board, the largest pension fund north of the border. The changes stretch beyond the US large-cap equity funds that have borne the brunt of the shift to passive investing and whose long-term results have been the worst compared with their benchmarks. Even funds such as the $825m BlackRock Global Small Cap fund will be converted to a new quantitative trading strategy that picks stocks based on numeric characteristics. It will adopt the new BlackRock Advantage brand, under which its quant funds will be grouped. That fund’s two managers, Murali Balaraman and John Coyle, are among the seven leaving the company. The Big Read Capital Group takes on the passive investors Once secretive asset manager embarks on an uphill battle against index funds In an interview, Mr Wiseman dismissed the idea that the fortunes of individual stockpickers will improve dramatically as central banks dial back easy monetary policy, as some fund managers have been hoping. “We don’t believe that hope is a viable strategy,” he said. A full list of affected funds will become clear on Wednesday morning, when BlackRock makes regulatory filings and begins to seek board approvals for the strategy shifts. In all, actively managed equity funds with assets totalling $8bn are involved, with about $6bn shifting to new quantitative investment strategies and $2bn switching to become fixed income funds. All of the new strategies come with lower fees, so BlackRock is hoping to limit the number of investors who pull their money because of the changes. The lower fees will mean $30m less in annual income, even if it manages to hold the existing assets. The company will also record a $25m charge in its next quarterly results to cover redundancy costs. According to the consensus of analysts surveyed by Bloomberg, the company is expected to post earnings of $793m for the first three months of this year, up 20 per cent, on revenues of $2.8bn.

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This FT articles proves how HFT firms like Tower Research are impacting trading in banks

This FT articles proves how HFT firms like Tower Research are impacting  trading in banks

http://www.ft.com/cms/s/0/444c5a6a-6b7c-11e4-9337-00144feabdc0.html#axzz3KlagdiJp

This quote peaked my interest in this article:

Wake, a partnership with the HFT company Tower Research, is viewed as the bank’s response to massive technological and regulatory changes that have overtaken banks’ bond trading businesses in recent years.

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Review of HFT systems including X_Trader, Deltix, Quant Factory, Smart Quant, RTS RTD, Matlab Simulink with FPGA option

Hi there
Here is the second of half of this entire evaluation. This includes the following:
1. X_Trader from TradingTechnologies review: This trading platform is leading for professionals with a risky business model
2. Deltix is most feature rich HFT quant trading high end platform on the market!
3. QuantFactory has blah HFT solution not as rich as Deltix or X_Trader
4. Smart Quant is kind of dated and not so polished as compared to the major HFT trading offerings
5. Popular RTS RTD Tango is decent solution for HFT but nothing compared to competition
6. Use of Matlab Simulink with FPGA hardware option for ultimate ultra low latency HFT option if you want DMA
This is well worth the effort to do but I spent 6 hours of my time doing it. This is why I promote the QuantLabs.net Premium Membership to help fund fund these types of investigations. Without my members, efforts like this would not be possible! So thanks to them.
Thanks Bryan

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Institutional investors air HFT concerns – FT.com | FT Trading Room

 

Asset managers worried about rising costs of equity trading

 

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