High-Flyer
Native name
幻方
TypePrivate
IndustryHedge fund
Artificial intelligence
Founded2015 (2015)
FoundersXu Jin
Zheng Dawei
HeadquartersHangzhou, Zhejiang, China
AUMUS$5.5 billion (October 2023)
Number of employees
160 (2021)
Websitehigh-flyer.cn
Footnotes / references
[1][2][3][4]

High-Flyer (Chinese: 幻方; pinyin: Huàn Fāng) is a Hangzhou-based hedge fund and artificial intelligence (AI) company founded in 2015. It is one of the largest quantitative funds in China.

History

High-Flyer was founded in 2015 by three engineers from Zhejiang University.[1][2][5] They generated ideas of algorithmic trading as students during the 2007–2008 financial crisis.[1][2][5] The company has two AMAC regulated subsidiaries, Zhejiang High-Flyer Asset Management Co.,Ltd. and Ningbo High-Flyer Quant Investment Management Partnership LLP which were established in 2015 and 2016 respectively.[1][5] The two subsidiaries have over 450 investment products.[5]

In 2016 the firm experimented with a deep learning algorithmic model to take stock positions and began testing in trading the following year.[2]

In 2019, the company established High-Flyer AI which was dedicated to research on AI algorithms and its basic applications.[6] In the same year the company set up a SFC regulated subsidiary in Hong Kong named High-Flyer Capital Management (Hong Kong) Limited.[6] It was approved as a Qualified Foreign Institutional Investor one year later.[7][8]

In 2020, the company established Fire-Flyer I, a supercomputer that focuses on AI deep learning.[5][7] It cost approximately 200 million Yuan.[5][7]

In 2021, Fire-Flyer I was retired and was replaced by Fire-Flyer II which cost 1 billion Yuan.[8]

At the end of 2021, High-Flyer put out a public statement on WeChat apologizing for its losses in assets due to poor performance.[3][5] The performance of over 100 of its investment products declined by over 10%.[5] High-Flyer stated that its AI models did not time trades well although its stock selection was fine in terms of long-term value.[3][5] The models would take on higher risk during marker fluctuations which deepened the decline.[3][5] In addition the company stated it had expanded its assets too quickly leading to similar trading strategies that made operations more difficult.[3][5] Up until this point, High-Flyer produced returns that were 20%-50% more than stock-market benchmarks in the past few years.[5] Higher

In 2022, the company donated 221 million Yuan to charity as the Chinese government pushed firms to do more in the name of "common prosperity".[9]

In March 2023, it was reported that High-Flyer was being sued by Shanghai Ruitian Investment LLC for hiring one of its employees.[4] The rival firm stated the former employee possessed quantitative strategy codes that are considered "core commercial secrets" and sought 5 million Yuan in compensation for anti-competitive practices.[4] In May 2023, the court ruled in favour of High-Flyer.[10]

In April 2023, High-Flyer announced it would form a new research body to explore the essence of artificial general intelligence. However it would not be used to perform stock trading.[11]

In October 2023, High-Flyer announced it had suspended its co-founder and senior executive Xu Jin from work due to his "improper handling of a family matter".[12]

Background

High-Flyer's investment and research team had 160 members as of 2021 which include Olympiad Gold medalists, internet giant experts and senior researchers.[13] It has been trying to recruit deep learning scientists by offering annual salaries of up to 2 million Yuan.[2]

See also

References

  1. 1 2 3 4 "百亿幻方量化规模爆增的后遗症|界面新闻". www.jiemian.com (in Chinese).
  2. 1 2 3 4 5 "Billions Going to China's Quants Takes Fight to Global Funds". Bloomberg.com. 31 May 2020.
  3. 1 2 3 4 5 "China's Top Quant Hedge Fund High-Flyer Apologizes for Loss". Bloomberg.com. 29 December 2021.
  4. 1 2 3 "Hedge Fund Feud Over China Quant Trader Shows Growing Talent War". Bloomberg.com. 7 March 2023.
  5. 1 2 3 4 5 6 7 8 9 10 11 12 Feng, Rebecca. "Top Chinese Quant Fund Apologizes to Investors After Recent Struggles". WSJ. Retrieved 1 March 2023.
  6. 1 2 "顶流量化私募集体出手！拿下这一牌照_财经_中国网". finance.china.com.cn. Retrieved 1 March 2023.
  7. 1 2 3 "起底私募"新通道"，幻方量化"曲线玩法"揭开盖子". c.m.163.com (in Chinese). Retrieved 28 February 2023.
  8. 1 2 财联社 (29 January 2021). "幻方量化"萤火二号"堪比76万台电脑？两个月规模猛增200亿". finance.sina.com.cn. Retrieved 1 March 2023.
  9. ↑ "China Quant Fund Donates $53 Million as Xi Stresses Philanthropy". Bloomberg.com. 11 January 2023. Retrieved 28 February 2023.
  10. ↑ "China Hedge Fund Loses Case Against Top Quant Who Joined Rival". Bloomberg.com. 25 May 2023. Retrieved 31 December 2023.
  11. ↑ "[Exclusive] Chinese Quant Hedge Fund High-Flyer Won't Use AGI to Trade Stocks, MD Says". www.yicaiglobal.com. Retrieved 31 December 2023.
  12. ↑ Zhen, Summer (27 October 2023). "Top China hedge fund suspends founder, cites reputational hit from family matter". Reuters.
  13. ↑ "China Hedge Funds Pay $300,000 to Beat Wall Street to Best Graduates". Bloomberg.com. 31 August 2021. Retrieved 28 February 2023.
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