How humans outperformed the machines in 2020 at $6 billion Schonfeld Strategic Advisors

  • Schonfeld Strategic Advisors, the $6 billion hedge fund manager founded by billionaire Steven Schonfeld, returned 14.4% in its $2.3 billion Fundamental Equity fund and 9.4% in its flagship Strategic Partners fund last year.
  • The fundamental offering does not include any quant strategies, unlike the firm’s nearly $4 billion flagship fund.
  • The firm was fundraising for both its funds last year, despite a tough March when many quants were slammed by the volatility from the pandemic. 
  • Visit Business Insider’s homepage for more stories.

In a reflection of the overall industry’s 2020, the humans at $6 billion Schonfeld Strategic Advisors outperformed the machines.

Schonfeld’s $2.3 billion Fundamental Equity fund, which includes dozens of stock-trading teams but no quant strategies, made 14.% in 2020 thanks to a 4.4% return in December, according to a fact sheet the firm sent to investors seen by Insider. The only month the fund lost money was in March, when it fell by 4.3%. 

This performance beats Schonfeld’s flagship fund, the Strategic Partners fund, which runs nearly $4 billion. That fund returned 9.8% in 2020, according to a recent Bloomberg report, and made 4.8% in December. 

The firm declined to comment on performance. 

See more: Here are under-the-radar hedge fund managers who crushed 2020, including a new launch from a former Viking Global portfolio manager and a comeback from a one-time Goldman partner

The Strategic Partners fund includes the firm many quant strategies as well as fundamental stock-pickers. The firm was not immune to some of the troubles that quant funds ran into last March, when it fell by more than 10% thanks to the volatility from the pandemic. Major quants like Bridgewater, Renaissance Technologies, and Winton Group never recovered from the tough first quarter, and lost money on the year. 

Human-run stock-picking strategies had a banner year though. Managers like D1 Capital, Coatue, Tiger Global, and more put up massive returns, fueled by gains in growth stocks and private market companies. 

Schonfeld’s Fundamental Equity fund, which the firm was fundraising for last year, beat the average hedge fund, which made 11.6% on the year, according to Hedge Fund Research.

Between its flagship fund and the fundamental-only strategy, Schonfeld raised $1 billion, according to a Bloomberg piece from last summer. 

Insider obtained a copy of the fundraising pitchdeck the firm was using for the Fundamental Equity fund last year, and the 24-page pitch ran through fees, team composition, and strategy goals. The fact sheet sent to investors recently does show a small difference from the pitchdeck — the sector with biggest chunk of the portfolio now is financials at 18% followed by information technology, which used to be the largest sector exposure.  

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