CircleUp Hires From AQR for Systematic Private Fund Strategy

The firm is building its team to tackle quantitative investing in private markets.

San Francisco (David Paul Morris/Bloomberg)

San Francisco

(David Paul Morris/Bloomberg)

CircleUp has hired Ark Shi from AQR Capital Management as the firm expands its quantitative investing efforts in private equity.

Shi joined the San Francisco-based firm’s quant research group on October 24, according to Neil Constable, CircleUp’s chief investment officer. He will report to Ying Wang, portfolio manager and head of systematic research, who also previously worked for AQR.

CircleUp has been attracting talent with experience at well-known quant firms as it seeks capital for a systematic fund targeting consumer companies in private markets. Constable, who joined the firm in July as its first CIO, left his role overseeing GMO’s global equity portfolios to be an early mover in a new area of quant investing.

“The private markets are basically in the same state, from the point of view of data, as the public markets were thirty years ago,” Constable said. “The data has finally become available in certain corners of the private market.”

[II Deep Dive: CircleUp Hires GMO Partner as First CIO in Quant Push]

Institutional Investor reported last year that CircleUp, co-founded by Ryan Caldbeck and Rory Eakin, was aiming to raise about $375 million for a systematic private equity fund that will buy minority stakes in about 150 companies. The fundraising officially started in the middle of the third quarter of 2019, according to Constable.

He said CircleUp has received commitments from existing investors in the firm’s credit and discretionary strategies. The firm is also in late-stage conversations with “anchor” investors who can write large checks, he said, aiming to hold a first close for the systematic fund by early next year.

Tackling quantitative investing in private markets is drawing people to CircleUp who have an “entrepreneurial nature,” and want to work with data others don’t have, according to Constable.

Earlier this year, for example, Brian Elbogen joined CircleUp as a managing director on the firm’s systematic strategy team. He had previously worked for quant firm Two Sigma and Unison, a San Francisco-based investment firm targeting the homeownership market.

Elbogen is working alongside Wang, who CircleUp hired from AQR last year. He is responsible for the business side of the systematic strategy, and will reach out to the companies picked by CircleUp’s systematic fund for matters such as terms of its investment, according to Constable.

“CircleUp was organized as a technology and data firm first, and then we built an investment management business on top of the data platform,” he said. “That’s very appealing to quants.”