It's not about standing still and being safe. If anybody wants to keep creating, they have to be about change.

– Miles Davis

The success of systematic pioneers like Barclays Global Investors (BGI) was a function of management's commitment to thought leadership combined with their ability to commercialize ideas, resource critical infrastructure and business expansion, and restructure to accommodate growth. 

Success was also a function of timing, being in the right place at the right time, with the right people, and the right products. 

The current environment for systematic investing is characterized by challenges on multiple fronts. Cambio Systematic was created to assist our clients in these rapidly changing times, providing executive search and research-based consulting services to solve problems, avoid costly mistakes, and facilitate both organic and inorganic growth. 

With the expansion and maturation of the systematic investment industry, management challenges have become increasingly complex. 

  • Subpar performance, volatile return streams and relatively low fees impact the ability to properly resource idea generation, the buildout of new product lines, complex compliance infrastructures and global distribution capabilities.
  • Factor investing using traditional data has become mainstream, commoditized into "look-alike" smart-beta or alternative risk premia products.
  • Advances in machine learning, combined with alternative and unstructured sources of "big" data and concepts of privacy have impacted established fields of empirical finance, statistics and econometrics leading to a new paradigm in the search for alpha.

In this current environment, we have all seen dubious senior-level hirings, ill-advised business expansions and questionable acquisitions. In the past, costly mistakes were often hidden by revenue growth, especially during the expansive periods for quant strategies. 

Those days are over.