Leda Braga

#27/100 in #100extraordinarywomen

Leda Braga is the first woman ever to have made the cut to Institutional Investor's annual list o f richest hedge fund managers. As the head of Geneva-based Systematica Investments, Braga earned about $60 million last year and snagged the 44th spot on the ranking published recently. That puts her on par with two New York-based managers, Scott Ferguson of Sachem Head Capital Management and Mark Kingdon of Kingdon Capital Management.

Leda Braga, 49, is considered the most powerful female hedge fund manager in the world. In January 2015, she launched her fund, Systematica Investments, a computer-driven fund. Systematica is a computer-driven firm spun out from BlueCrest Capital. Her BlueTrend Fund was up 6.4% this year through April 8, nearly doubling the 3.4% return that it had last year, according to Institutional Investor, which cited the HSBC hedge fund database. Under Braga's helm, Systematica's assets have grown to $10.2 billion as of March 1. She manages more money than any other woman in the hedge fund industry. If this kind of perfomance goes on, Braga may soon land herself a spot on the top 25 list.

Before heading out on her own, Braga spent 14 years managing BlueCrest's biggest fund - computer-driven BlueTrend fund. Before that, she worked with BlueCrest's founders at JPMorgan as a quantitative analyst on the firm's derivatives research team. Going it alone is working out for Leda Braga, the Brazilian-born hedge fund manager who left Michael Platt’s BlueCrest Capital Management in January 2015. Her standalone firm now oversees more than his for the first time, according to a person familiar with the matter. The Brazilian-born portfolio manager, who holds a PhD from Imperial College, joined BlueCrest when she was 34-weeks pregnant. In the male-dominated world of Wall Street, Braga said she hasn't experienced difficulties.

"What can I say? Me, personally, I've always liked to work," she said at the CNBC Delivering Alpha Conference held at the Pierre Hotel in Midtown Manhattan on Wednesday. The "queen of the quants," as Braga is sometimes known, told the room that in the next ten years, the systematic approach the trading - the one she deploys - will prevail. When it comes to making trades, there are two contrasting approaches -discretionary and systematic. Discretionary trading relies on the fund manager's own decision-making. Systematic trading uses computer models, research firm Preqin explained. "I think in a world where there's regulatory pressures, investor pressure for lower fees... I think the systematic approach will prevail in the long run. I think the next ten years for sure," Braga said. During her talk, Braga shared an anecdote from a previous conference where an audience member questioned the merits of algorithmic trading. A man sitting in the front row challenged her method, saying: "All you've got to forecast to the future is the data." Braga rebuked him, saying, "You think the discretionary guy has what? A crystal ball? At the end of the day, the business of investment management is the business of information management. I think the algorithmic approach is very good approach to do it." Braga conceded that systematic trading does face a "stumbling block" - something called "algorithmic aversion." "She's so impressive," one attendee was overheard saying.

Research from UPenn's Wharton has found that even if an algorithm consistently outperforms a human forecaster, people are more likely to lose confidence in the algorithm than the human after they both make the same mistake. The reason, according to an HBS paper on the research, is that there's a belief the human forecaster can make improvements and learn from the mistake. But Braga says algorithms can improve too. "[We] know these things work and yet we shy away from them," Braga said. "We scrutinize the algos with a lot less tolerance than we scrutinize human action." Braga thinks that over time people will become more "amiable" toward algorithms - especially since we live in a world full of them, from Apple to Uber. 

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