Arrowstreet Capital

Last updated

Arrowstreet Capital, Limited Partnership
Type Private
Industry Investment Management
FoundedJune 1999;24 years ago (1999-06)
Founders
Headquarters John Hancock Tower, Boston, Massachusetts, U.S.
Key people
AUM US$171 billion (March 2023)
Number of employees
415 (2023)
Website www.arrowstreetcapital.com
Footnotes /references
[1]

Arrowstreet Capital (Arrowstreet) is an American investment management firm based in Boston. The firm is noted for its usage of quantitative analysis in its approach to investing as well as maintaining a low profile despite its large number of assets under management. [2]

Contents

Background

Arrowstreet was founded in 1999 by Bruce Clarke, the CEO of PanAgora Asset Management along with John Y. Campbell and Peter Rathjens who were also executives at the firm. Arrowstreet was established to manage money for institutional investors by investing in international and emerging market equities. Clients include the Oregon Public Employees Retirement System, CalPERS and Macquarie Group. [2] [3] [4] [5] [6] [7]

In 2002, Arrowstreet launched its hedge fund business. It had to assure its clients that the new business would not drain talent from its traditional asset management business or cause intra-office conflict with respect to compensation as the strategies were different. [8]

Pensions & Investments noted that Arrowstreet makes use of computer models to allow the firm to perform well in different market environments and tends to avoid systematic biases such as favouring certain stocks. The models appear to take "non-linear" factors into account to a greater extent than its peers. During the value equity rally between 2003 and 2006 after the Dot-com bubble, Arrowstreet lagged behind peers such as Acadian Asset Management and LSV Asset Management when it came to performance. However, when it came to a volatile market cycle such as the 2007–2008 financial crisis, Arrowstreet had a much stronger performance over its competitors. [2]

With regards to stock selection, the investment team at Arrowstreet would use computer models to go through thousands of stocks and rank them by attractiveness based on selected criteria. For the core global equities fund, the team narrowed down the selection to 150-200 stocks. [2] [5] [6] [8]

In 2008, Arrowstreet repurchased shares from outside owners to become 100% employee owned. [6]

In March 2011, former Treasury official, Anthony Ryan left his position of chief administrative officer at Fidelity Investments to join Arrowstreet. Ryan who previously worked with Arrowstreet's co-founders at PanAgora now serves as the CEO of Arrowstreet after Clarke stepped down from his position as CEO in 2014. [6] [9]

Arrowstreet maintains a low profile and its clients have stated the investment process of the firm is like a black box as it is difficult to ascertain in detail how the firm operates. [2]

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References

  1. ↑ "Form ADV" (PDF). SEC.
  2. 1 2 3 4 5 Appell, Douglas (March 4, 2011). "Arrowstreet quietly bucks trend with successful quant performance". Pensions & Investments. Retrieved August 14, 2023.
  3. ↑ "Ex-PanAgora Execs Start New Fund". Financial Planning. June 28, 1999. Retrieved August 14, 2023.
  4. ↑ "PanAgora CEO and investment chief to leave". www.bizjournals.com. June 11, 1999. Retrieved August 14, 2023.
  5. 1 2 "Arrowstreet Global Equity Review: Performance, AUM, Founders". Insider Monkey. Retrieved August 14, 2023.
  6. 1 2 3 4 "Retirement Board Meeting" (PDF). San Francisco Employees' Retirement System. November 14, 2018.
  7. ↑ Reporter, a Wall Street Journal Staff (November 20, 2002). "Calpers Allocates Funds To Arrowstreet Capital". Wall Street Journal. ISSN   0099-9660 . Retrieved August 14, 2023.
  8. 1 2 Clair, Chris (December 14, 2006). "New set of problems: Hedge funds cause conflict, compensation puzzles". Pensions & Investments. Retrieved August 14, 2023.
  9. ↑ Appell, Douglas (March 22, 2011). "Fidelity's Ryan to join Arrowstreet". Pensions & Investments. Retrieved August 14, 2023.
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