High-Flyer (company)
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Native name | 幻方 |
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Company type | Private |
Industry | Hedge fund Artificial intelligence |
Founded | 2015 |
Founders | Xu Jin Zheng Dawei Liang Wenfeng |
Headquarters | Hangzhou, Zhejiang, China |
AUM | US$8 billion (June 2024) |
Number of employees | 160 (2021) |
Website | high-flyer |
Footnotes / references [1][2][3][4][5] |
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
[edit]High-Flyer was founded in 2015 by three engineers from Zhejiang University.[1][2][6] They generated ideas of algorithmic trading as students during the 2007–2008 financial crisis.[1][2][6] 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][6] The two subsidiaries have over 450 investment products.[6]
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.[7] In the same year the company set up a SFC regulated subsidiary in Hong Kong named High-Flyer Capital Management (Hong Kong) Limited.[7] It was approved as a Qualified Foreign Institutional Investor one year later.[8][9]
In 2020, the company established Fire-Flyer I, a supercomputer that focuses on AI deep learning.[6][8] It cost approximately 200 million Yuan.[6][8]
In 2021, Fire-Flyer I was retired and was replaced by Fire-Flyer II which cost 1 billion Yuan.[9] By this year all of High-Flyer’s strategies were using AI.[5]
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][6] The performance of over 100 of its investment products declined by over 10%.[6] 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][6] The models would take on higher risk during marker fluctuations which deepened the decline.[3][6] In addition the company stated it had expanded its assets too quickly leading to similar trading strategies that made operations more difficult.[3][6] Up until this point, High-Flyer produced returns that were 20%-50% more than stock-market benchmarks in the past few years.[6] 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".[10]
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.[11]
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.[12]
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".[13]
In June 2024, Financial Times reported that High-Flyer had created an open source Large language model (LLM) named DeepSeek-V2 that was cheaper than its peers with a price of 2 RMB for every million output tokens. University of Waterloo Tiger Lab’s leaderboard ranked DeepSeek-V2 seventh on its LLM ranking. [5]
Background
[edit]High-Flyer's investment and research team had 160 members as of 2021 which include Olympiad Gold medalists, internet giant experts and senior researchers.[14] It has been trying to recruit deep learning scientists by offering annual salaries of up to 2 million Yuan.[2]
From 2018 to 2024, High-Flyer has consistently outperformed the CSI 300 Index.[5]
See also
[edit]References
[edit]- ^ a b c d "百亿幻方量化规模爆增的后遗症|界面新闻". www.jiemian.com (in Chinese). Archived from the original on 28 February 2023. Retrieved 1 March 2023.
- ^ a b c d e "Billions Going to China's Quants Takes Fight to Global Funds". Bloomberg.com. 31 May 2020. Archived from the original on 25 May 2022. Retrieved 1 March 2023.
- ^ a b c d e "China's Top Quant Hedge Fund High-Flyer Apologizes for Loss". Bloomberg.com. 29 December 2021. Archived from the original on 5 December 2022. Retrieved 1 March 2023.
- ^ a b c "Hedge Fund Feud Over China Quant Trader Shows Growing Talent War". Bloomberg.com. 7 March 2023. Archived from the original on 9 March 2023. Retrieved 7 March 2023.
- ^ a b c d McMorrow, Ryan (9 June 2024). "The Chinese quant fund-turned-AI pioneer". www.ft.com.
- ^ a b c d e f g h i j k l Feng, Rebecca. "Top Chinese Quant Fund Apologizes to Investors After Recent Struggles". WSJ. Archived from the original on 28 February 2023. Retrieved 1 March 2023.
- ^ a b "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. Archived from the original on 1 March 2023. Retrieved 1 March 2023.
- ^ a b c "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). Archived from the original on 28 February 2023. Retrieved 28 February 2023.
- ^ a b 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. Archived from the original on 1 March 2023. Retrieved 1 March 2023.
- ^ "China Quant Fund Donates $53 Million as Xi Stresses Philanthropy". Bloomberg.com. 11 January 2023. Archived from the original on 16 March 2024. Retrieved 28 February 2023.
- ^ "China Hedge Fund Loses Case Against Top Quant Who Joined Rival". Bloomberg.com. 25 May 2023. Archived from the original on 16 March 2024. Retrieved 31 December 2023.
- ^ "[Exclusive] Chinese Quant Hedge Fund High-Flyer Won't Use AGI to Trade Stocks, MD Says". www.yicaiglobal.com. Archived from the original on 31 December 2023. Retrieved 31 December 2023.
- ^ Zhen, Summer (27 October 2023). "Top China hedge fund suspends founder, cites reputational hit from family matter". Reuters.
- ^ "China Hedge Funds Pay $300,000 to Beat Wall Street to Best Graduates". Bloomberg.com. 31 August 2021. Archived from the original on 15 September 2021. Retrieved 28 February 2023.