As an academic, MIT finance professor Andrew Lo made his name attacking the efficient-markets theory and proving that a small cadre of great money managers can beat the market.
By Hal Lux
December 2000
Institutional Investor Magazine
Soon he’ll discover whether he himself is one of the chosen. In the next few months, Lo, who has taken a one-year leave from MIT and formed an investment shop called AlphaSimplex Group, will launch a quantitative U.S. equities fund. Paloma Partners hedge fund manager Donald Sussman, who launched the career of quant trading star David Shaw, will supply all the capital for Lo’s new fund, whose size is as yet undetermined. Paloma, says Lo, seems to have the “desire to fund us to capacity.” Best known for his work in hard-core financial econometrics, Lo has recently focused on more eclectic research, such as taking brain scans of successful traders to understand their genetic wiring. Whether Lo has the DNA to trade remains to be seen, but for now Sussman is betting on the brainy researcher
