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A triumph of science over art

The term "black box" investing has often been applied to quantitative fund management, though it is seen by its practitioners as a somewhat pejorative description. Whatever black boxes they have at BGI, they certainly seem to work.

Traditional active managers use the phrase while looking down their noses at quant fund management and its reliance on technology. They feel it lacks the panache of stock-picking.

Yet the performance of the old-school investors in recent years has not been anything to shout about. And set against that, Andrew Skirton, co-CEO of BGI, is keen to underline his firm's management style. "We are not in the entertainment industry," he says. "Our philosophy is that investment is a science and not an art."

So what is the culture at BGI? You could be forgiven for thinking that the firm attracts boffins and eggheads who like to crunch numbers and analyze spreadsheets rather than get a feel for a business through kicking tyres and getting to know the management.

In order to quash that idea, Skirton says: "There is sometimes a suggestion that we are using technology to replace investment insight and that would be a very foolish and crazy thing to do."

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