AQR Capital Management founder Cliff Asness is a high-flyer. Even within the hedge fund industry, which is notoriously tough, the 45-year-old Asness has managed to grow his AQR Capital to $42 billion in assets under management, which makes his fund one of the top players in hedge funds. Asness “is a Ph.D… who narrowly chose managing money over a professorship and remains influential in academic circles. That’s the elixir for his success, reports Fortune.
“When he designs a market-beating strategy, his data are so convincing that he gets the research community overwhelmingly on his side. The sway of his science gives him just the right pitch to keep gathering assets from America’s big institutional investors.”
But, why stop there? Asness has begun to move into largely uncharted area for a hedge fund manager – mutual funds. “Asness is now offering sophisticated strategies to the broad public that for years have been available only to institutional clients,” writes Fortune. Not to be dramatic, but the move could reshape the investing world. On the one hand, there will be imitators. AQR has nine mutual funds right now with combined assets at $5.5 billion – certainly not a number to turn your nose up at and other funds are going to want a piece of the action. JP Morgan’s Highbridge Capital currently has seven mutual funds. On the other hand, AQR is offering a sophisticated investment product at a low price – mutual funds don’t have the high management and performance fees hedge funds do. Given poor hedge fund performance across the board and the fact that Asness is offering essentially the same product, investors will soon start questioning the validity of the much higher high hedge fund fees.