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Singapore's GIC hires big data expert in quant strategy push

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GIC Pte has hired a big data expert as it expands computer-driven investments through a quantitative group started earlier this year.

[SINGAPORE] GIC Pte has hired a big data expert as it expands computer-driven investments through a quantitative group started earlier this year.

The Singapore sovereign wealth fund appointed Michael Recce in the newly created role of chief data scientist last month to work in the GIC Data and Analytics Department, according to a spokeswoman.

Mr Recce, a former associate professor at the New Jersey Institute of Technology, is based in Singapore and is focusing on collecting publicly available data and analysing them for patterns.

While the state fund has been using quantitative investment strategies for some years, it combined those activities in the Systematic Investment Group started earlier this year headed by former Goldman Sachs Group Inc Executive Director Percy Wong, the spokeswoman said.

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The expansion into investments using algorithms is part of a global shift as investors bet machines, devoid of emotion, are better placed to make money or protect their capital in volatile markets.

GIC is seeking extra returns in new areas as it warned in July that "most asset classes are inflicted with a high valuation problem" which will weigh on investment returns in the coming decade.

As the global hedge fund industry is seeking new ideas to boost performance amid lacklustre returns, many firms are realising that computer models aren't infallible. For instance, a startup backed by hedge fund manager Kyle Bass was unable to correctly predict that Donald Trump would win the US presidential election, even though it was able to call the UK's Brexit vote accurately in June.

Quant Push

GIC's Systematic Investment Group will invest across assets, and will use its quantitative models to pick individual securities and identify macroeconomic themes, according to the spokeswoman. The unit currently has more than ten employees and will expand further, she said.

Other big investors that have expanded capabilities in this area include London quant firm Winton Capital Management, which said in April it's starting a data science center in San Francisco and plans to hire some 40 scientists.

The US$26 billion Citadel in October promoted its former chief risk officer, Alex Lurye, into a new role of chief data officer. This month, Third Point founder Dan Loeb told investors that hedge funds need to use data sets and quantitative techniques to remain competitive.

Before joining GIC, Mr Recce worked at a data research firm called Quantcast Corp and as chief scientist at Fortent Inc, an IT firm providing anti-money laundering and fraud detection technologies to banks and insurance firms, according to his profile.

Singapore's state fund, founded in 1981, doesn't disclose the size of its assets under management, saying only that it manages "well over" US$100 billion. The London-based Sovereign Wealth Center puts its total holdings at US$354 billion, making it the world's sixth-biggest state fund.