A Quant Hedge Fund Has Decided to Back Some Human Stock Pickers

Bainbridge Partners, a $900 million hedge fund firm that relies on algorithms to make its money, is now giving human traders a chance.

The London-based money manager is investing $60 million in Andra Asset Management, which uses fundamental analysis to bet on small- and medium-sized companies in Europe, according to a company statement. Bainbridge will also get a stake in the firm co-founded by Sarunas Mazeikis and Jacob Brahms.

While the investment is small, it may be another sign of a shift in sentiment in the industry following a volatile year that showed human stock pickers proving their mettle in a global crisis. Discretionary hedge funds such as Brevan Howard, Andurand Capital and BlueCrest posted record gains last year, while some of the best-known quant firms like Renaissance Technologies, Winton and Two Sigma suffered losses.

Mazeikis, who previous worked at Marble Bar Asset Management, and Brahms, a former employee at Artemis Investment Management, specialize in picking European small and mid-cap equities. Their Andra Absolute Return fund has gained about 17% since its launch in December 2019, according to the statement.

“Because of their lower liquidity profile and reduced analyst coverage, small and mid-caps are usually more suited to a discretionary approach,” said Antoine Haddad, chief executive officer of Bainbridge.

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