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In corners of the City, Mayfair and London's Kensington the quiet hum of computer hardware is the only sound of money being made by some of the country's biggest hedge funds.
Four computerised, or quantitative, managed futures funds, including Europe's largest hedge fund, have grabbed a 21.5 per cent share of the world market, expanding twice as fast as the industry in the past seven years to establish London as a serious operator.
All have close links to AHL, the $20 billion fund that forms the core of Man Group's position as the world's biggest listed hedge fund manager. And all are spending millions of pounds on research, competing with each other and top investment banks to hire the best mathematics, physics and astrophysics PhDs to spot new ways of making money.
At the heart of AHL, Winton Capital, Aspect Capital and Bluetrend, part of BlueCrest, 25 per cent owned by Man, is one aim: find algorithms, which are able to predict the movements of prices across futures markets from cocoa to equity indices. Broadly, if the price is rising they buy, while if it is falling they sell, profiting as the trend continues.
"These programmes are about doing many things a little bit better, rather than there being particular silver bullets," says the chief operating officer of one fund.
The success of the funds has been stunning: the four now manage $39 billion between them, with customers ranging from German and Japanese private investors buying funds carrying guarantees through to pension funds and central banks.
But growing competition in the business has also sparked an intellectual arms race, as the funds race to outspend each other on research to identify new "price signals", statistical links between price movements and anything from economic indicators to Wall Street weather or fashion.
"People learn that this or that behaviour exists and they change their behaviour," a senior executive at a big US hedge fund said. "As a result some of these signals degrade, over five years or so, although others, remarkably, stay for 20 years."
Efforts to recruit the best post-PhD students are becoming increasingly expensive. Man and Winton - set up by David Harding, originally the "H" in AHL - have both set up permanent research centres in Oxford in an attempt to lure the best talent from the university, and have endowed professorships at Oxford and Cambridge respectively.
John Morrison, chief executive of Man Investments, of which AHL is part, says hiring top scientists has become harder, although eased somewhat after the August credit crunch.
"[When we started] recruiting the best PhDs out of Oxford or Cambridge wasn't that difficult," he said. "Now those people are highly in demand."
Anthony Todd, a former AHL executive who is now chief executive of Aspect, co-founded by Martin Lueck and Michael Adam, originally AHL's "L" and "A", says research is increasingly important, as the "half-life" of trading models falls.
"You're seeing a bifurcation in the sector," he says. "A top tier of managers is being created who have a significant investment in research, and if you don't invest in research it is going to cost you."
In that bifurcation, London's biggest competitor for research is in Long Island, New York, home of Renaissance Technologies, set up by former maths professor Jim Simons. Renaissance has just set up a new medium-term trend-following fund, which will apply similar models to the very short-term futures trading of its legendary Medallion fund, one of the most sought-after before it ejected external investors.
Harding, of Winton, says London has a good opportunity to expand further thanks to the "cluster" formed round AHL, which he likens to the "Turtles".
The Turtles were the commodity traders who took part in the 1983 bet over whether top traders were born or made - with the conclusion that a set of rules could produce great returns.
The rules used by the London funds are no longer simple, and the research effort goes beyond the two weeks' training given to the Turtles. But the computers in London are made, not born.
The success of the funds has been stunning: the four now manage $39 billion between them, with customers ranging from German and Japanese private investors buying funds carrying guarantees through to pension funds and central banks.
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