Five years ago, quant hedge fund Engineers Gate was reeling — from poor returns, investor redemptions, and the ignominious departure of its founder.
Its fortunes look different these days. The fund is now firmly in growth mode, preoccupied with deploying $4 billion in assets to a growing roster of portfolio managers and keeping a performance hot streak rolling.
Engineers Gate is up about 12% through the end of May, according to people familiar with the performance. That tops the 2% composite gain among hedge funds and the 7.9% gain among equity quant funds, according to hedge fund analytics firm PivotalPath’s index data through May.
The fund posted double-digit gains in 2023 and 2024 as well, returning 13.6% and 10.5%, respectively, a person familiar with the matter said.
A spokesman for the firm declined to comment.
Its portfolio manager roster has more than doubled since the start of 2024, growing from 30 to more than 75 today, people familiar said. It expanded to Singapore last year, appointing Rafael Andreata and Mingyan Huang to lead their Asia Pacific build out, Business Insider previously reported. In January, ex-Schonfeld PM Mike Daylamani joined to launch a fundamental investing business, expanding beyond Engineers’ systematic trading roots.
To be sure, rapid growth at multimanager hedge funds doesn’t necessarily correlate to sustained investment performance, and in many cases, the opposite has happened — brisk buildouts have led to retrenchment at firms like Schonfeld, Eisler, and Brevan Howard.
But the progress marks a sharp turn from 2020, when poor performance and revelations about founder Glenn Dubin’s ties to convicted sex offender Jeffrey Epstein spurred investor exits. That year, Dubin sold his stake in the firm he launched in 2014 and was replaced by longtime deputy Greg Eisner, who remains CEO.
To shore up capital, Blackstone Group filled the void left by anchor investor Canada Pension Plan Investment Board, as Bloomberg reported at the time, accounting for the bulk of Engineers’ $1 billion in assets.
After gains of 11% in 2020 and 25% in 2021, hedge fund giants Millennium and Point72 separately explored acquiring the fund in 2022, though a buyout didn’t materialize. Blackstone ended up selling its stake in Engineers Gate at the end of that year, and Millennium, which has become one of the top investors in other hedge funds via separately managed accounts, allocated $1 billion to the firm, according to people familiar with the matter.
Stephen Owen, who joined in 2014 and holds the title of chief architect and founding PM, according to his LinkedIn page, and Gavin Boyle, who joined in 2017 and leads the London office, have been significant contributors to the fund’s performance, people familiar said.
Another key move for Engineers Gate was its own prescient investment in an external hedge fund. The firm seeded quant startup TwinBeech Capital, which former Cubist PM Jinghua Yan launched in 2019. It’s been one of the best-performing new launches in years, according to several people familiar with the fund.
TwinBeech stumbled in 2024, but has consistently delivered high double-digit returns, the people said.
TwinBeech did not respond to requests for comment.
