Quantitative hedging is a business with distinctive business characteristics, high professionalism, and high requirements for supporting services. Its business characteristics are as follows:
(1) High level of professionalism in investment consulting . Quantitative hedging business requires managers to have high IT technology research and development capabilities such as data mining, strategy development, and programmed trading. According to overseas experience, managers engaged in quantitative hedging investments are all professional institutional investors with high-end talents with professional backgrounds in physics, mathematics, statistics, computers and other fields. They need to have the ability to develop quantitative investment models and continuous model optimization capabilities. Certain industry entry barriers.
Branches must also have certain identification capabilities in identifying and supporting quantitative hedging managers to avoid expending a lot of energy with little results.
(2) Quantitative hedging business has natural geographical distribution. Similar to the layout of public fund companies, most of the current major quantitative hedging managers are concentrated in Shanghai, Beijing, Shenzhen and other major financial market active areas, which is consistent with the uneven development of quantitative hedging business in various regions of the company.
(3) Product risks are relatively low. Currently, most of the quantitative hedging products on the market are market-neutral strategies to hedge against systemic risks in the securities market. Compared with traditional directional equity products, they have greater advantages in controlling product drawdowns and obtaining stable returns. As the short-selling mechanism continues to improve, hedging strategies will gradually become richer, such as statistical arbitrage, long-short strategies, paired trading, etc.
(4) Business implementation requires a dedicated support team. According to the practical experience of promoting quantitative hedging business in recent years, there are many technical problems that require coordination by the sales department at the business execution level. Each sales department must be equipped with a professional business team to support and quickly respond and solve existing problems. The actual situation is that most sales departments do not have enough human, financial and material resources to deploy a professional support team.
Based on the above characteristics of carrying out quantitative hedging business, higher comprehensive service requirements are put forward for securities companies:
(1) High IT system requirements. The quantitative hedging business model has extremely high requirements for IT systems. On the one hand, it is reflected in the stable and efficient response speed of the trading system and market data, and on the other hand, it is reflected in the ease of system integration and development.
(2) The demand for strategic research and development is high. With the continuous introduction of financial innovation tools, quantitative hedging managers can only achieve stable and excellent investment performance if they have the ability to continuously develop and optimize strategies. Our company needs to provide strong strategic research and strategic communication support.
(3) Product design and distribution requirements are high. The only way to develop the quantitative hedging business is to use a productized model to achieve economies of scale and expand productivity. Investment managers need securities firms to provide SPV design (such as trust, public offering, asset management and other legal structural arrangements), product structure design, risk control, backend A comprehensive package of supporting services such as operations and marketing organization matches the securities company's professional capabilities in product design, unified marketing organizational capabilities and the ability to integrate company headquarters resources.