GIC hires big data expert in quant push

GIC 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 Mr 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 spokesman.

Mr Recce, a former associate professor at the New Jersey Institute of Technology, 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 and headed by former Goldman Sachs executive director Percy Wong, the spokesman said.

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 are not infallible.

For instance, a start-up backed by hedge fund manager Kyle Bass could not predict Mr Donald Trump's win in the US presidential election, although it called Britain's Brexit vote accurately in June.

GIC's Systematic Investment Group will invest across assets, and use its quantitative models to pick individual securities and identify macroeconomic themes, according to the spokesman, adding that the unit has more than 10 employees and will expand further.

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

The US$26 billion (S$37 billion) Citadel in October promoted its former chief risk officer Alex Lurye to a new role as chief data officer.

This month, Third Point founder Dan Loeb told investors that hedge funds needed to use data sets and quantitative techniques to remain competitive.

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

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

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A version of this article appeared in the print edition of The Straits Times on November 29, 2016, with the headline 'GIC hires big data expert in quant push'. Print Edition | Subscribe