Computational biologist making waves as hedge fund quant

New York

HEDGE fund manager Desmond Lun's 21 per cent average return over the last four years springs from an unlikely source - a petri dish of algae.

Mr Lun, 37, is a new kind of quant, combining AI (artificial intelligence) wizardry with old-school biology to trade futures. Although his Taaffeite Capital Management is small, Mr Lun makes a big claim: His research into one of the natural world's most byzantine systems - the biological cell - has given him an edge in untangling the secrets of financial markets.

Computational biologists such as Mr Lun are late to the quant wave that's upending hedge funds. Physicists and mathematicians were the first disruptors, who found that their statistical models, neural networks and machine-learning tools have had as many stumbles as triumphs. Now comes Mr Lun, with AI derived from algorithms he …