Episode summary
What If Lower Volatility Is the Wrong Goal | Open Interest | Ep.25
Top Traders Unplugged
· · 52 min · Hosts: Niels Kaastrup-Larsen, Moritz Seibert · Guests: Suhaimi Zainul-Abidin
Summary
Suhaimi Zainul-Abidin explains that QuantEdge was built from first principles in Singapore in 2006 by two founders with statistical and actuarial backgrounds, starting with about $3 million and growing into a nearly $8 billion systematic firm. He says the original idea was to compound capital aggressively by harvesting risk premia across markets rather than trying to forecast them, and that the firm now combines equities, bonds, commodities, currencies and insurance-linked securities.
He argues that diversification should not just lower volatility for its own sake; it should create room to take more risk, not less. QuantEdge deliberately targets about 25% volatility because Suhaimi believes that is a better balance between higher expected returns and staying far enough from catastrophic loss. The firm now runs hundreds of markets, rebalances three times a day, and uses specialist teams for equities, rates, macro and ILS.
Suhaimi also says the firm’s liquidity structure is designed to match its strategy and investor base. Long lockups, semi-perpetual share classes and a permanent capital base help reduce run risk and keep investors aligned through drawdowns. He points to March 2020 as the toughest period, when QuantEdge lost 29% in a month, but says the episode led to tighter risk controls, more frequent rebalancing and better broker terms.
Key takeaways
- Suhaimi says QuantEdge targets around 25% volatility intentionally, because reducing risk too much can leave return potential on the table.
- The firm now trades close to 300 markets and uses diversification across equities, bonds, commodities, currencies and ILS to combine many independent risk premia.
- Suhaimi says QuantEdge’s capacity is around $30 billion to $35 billion, but only if returns are not diluted.
- He says long lockups and semi-perpetual share classes protect the strategy from investor runs during drawdowns.
- March 2020 was the firm’s toughest period, with a 29% monthly drawdown that drove changes to risk targeting, rebalancing frequency and broker terms.
Notable quotes
“we want to achieve the same kind of diversification that we do in our general markets portfolio”
“we're trying to collect and put together as many independent uncorrelated bets as possible”
How the episode opens
When people sort of look at equities and say look I've got a diversified book uh but if they're referring to just one market that's hardly diversification in fact even across markets there's actually quite a lot of positive correlation uh between equity markets but once you throw in commodities what happens in you know the energy markets versus agriculture and grains uh it's hugely different so so commodities is a huge diversifying sort of asset class
Welcome to top traders unplugged In markets, success doesn't come from predicting what happens next. It comes from being prepared for what you can't predict. In each episode, we go deep with some of the world's most thoughtful minds in investing, economics, and beyond to understand how they think, how they prepare, and how they decide, and the experiences that shaped how they see the world.
No noise, no shortcuts, just real conversations to help you think better and invest with confidence. Hello and welcome to another episode of the open interest series on top traders unplugged. This is episode number 25 and I'm your host Maritz Seabird.
Today I'm particularly excited to welcome Suimi Sen Abidine, the CEO of Quantage to our show. Quantage is a very successful Singapore-based systematic trading firm with now close to 8 billion in assets under management. But despite their great returns and their success as a firm, they tend to keep a relatively low profile and rarely appear on podcasts or give interviews, which I think makes today's conversation all the more special.
I first reached out to Suhami at the end of August when I was on vacation and that is when I invited him first to the open interest series to which he agreed which is great. And then just a couple of weeks ago, Neils was traveling to Singapore and he had the opportunity to meet Suheimi and the Quantich team in person during a client event.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- volatility targeting
- risk premia
- systematic diversification
- insurance-linked securities
- portfolio capacity and lockups
Companies and tickers mentioned
- QuantEdge
Watch the episode
Watch “What If Lower Volatility Is the Wrong Goal | Open Interest | Ep.25” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Top Traders Unplugged, this episode and its artwork belong to Niels Kaastrup-Larsen. Octagon is not affiliated with the show; this page is an independent summary.
