As a systematic investor, David Harding has been relying on simulations to research investment strategies since the 1980s. Back in the old days, we were restricted by the speed of computing, says Harding, 54, who co-founded pioneering commodities trading adviser Adam, Harding & Lueck (AHL) in 1987. It was a continual cycle of finding a way to use the faster computers to do a more complicated bit of simulation and then waiting for the new computers to arrive. After selling AHL in 1996 to what is now Man Group, Harding started London-based Winton Capital Management the following year with $2 million. Today the 450-person firm manages $34.5 billion, and computing power is no longer an issue. For Harding, a self-described science geek who studied theoretical physics at the University of Cambridge, innovation centers on the intellectual technology development of different statistical ways of looking at data, different ways of visualizing data and the inferences from data. Winton, which has offices in a half dozen countries, recently opened a six-person outpost in San Francisco to tap into Silicon Valleys data-science talent pool. The firm has been supporting the fintech revolution. In 2014 it began working with Cyber London, Europes first cybersecurity incubator. Winton cosponsors Cyber London and is currently hosting its third cohort of start-ups at the firms Hammersmith headquarters. Last year Harding launched Winton Ventures to invest the firms own money in young data-science companies, particularly those working with new types of data from nontraditional sources. We attempt to use the scientific method broadly to evaluate the relationship between things that affect the prices of things, what we call explanatory variables, potential influences on price and the statistical likelihood of price change, Harding says. To a greater or lesser extent, thats what all systematic investors are doing.
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