Top Female Trend Follower: Leda Braga of BlueCrest

A fund manager (and client) writes me from Brazil:

Hi Michael. you ever heard about Leda Braga? She is a Brazilian trend follower with more than $1B USD in assets. She runs BlueCrest and Man has been allocating in her fund for a long time now. Interesting that she is a women, Brazilian, a trend follower and few people know her.

Very quiet firm…more:

Braga, whose $8 billion Blue­Trend Fund is a momentum-based, trend-­following fund, stands alone as the world’s top female portfolio manager in terms of assets under management. Although she prefers to fly under the radar, fellow hedge-fund mana­gers swoon over her knowledge of FX/interest-rate hybrids, equity derivatives and interest-rate exotics, offering praise composed of equal parts shock and awe. As one multibillion-dollar hedgie puts it: “I met her at a Tokyo conference, and if there were ever a quant strategy I would invest in, it’s hers. She’s constantly stressing the need to upgrade and refine trading systems, that you can’t just walk away and expect them to perform with markets shifting so quickly. She’s a dynamo.” Braga heads BlueTrend’s quant strategies. She’s also the president of BlueCrest Capital.

Braga, 42, attended Imperial College in the U.K., where she earned a Ph.D. in engineering and worked for three years after graduation as a lecturer and a research-project manager. She is reportedly the largest staff equity holder in parent company BlueCrest, after legendary cofounders Bill Reeves and Michael Platt. Chances are this might have something to do with the massive returns she has bagged since her fund’s inception in 2004, not to mention her flawless handling of the subprime crisis, which has flummoxed many of her competitors. “Last year, the BlueTrend fund returned approximately 28 percent, net of fees, and this year it was up about 13 percent on the same basis by the end of July,” notes BlueCrest CFO Andrew Dodd.

A former JPMorgan colleague of Reeves and Platt, who quit their jobs as proprietary traders in 2000 to found BlueCrest, ­Braga worked for nearly seven years as a vice president and quant analyst on the bank’s London derivatives-research team before joining the spin-off and derivatives risk-management firm Cygnifi Derivatives Services in 2000. BlueCrest snared her in October 2001, deciding its successful maiden voyage into fixed-income and currency markets should be encored with some black-box strategies. Braga’s fund launched in 2002. A year later, Man Group snapped up a minority stake in BlueCrest, and the rest is trading history.

Despite all the fanfare, Braga is strikingly modest. Attempting to reach her, Trader Monthly ­received an e-mail in which she beseeched her assistant to ward us off. “Aaaarghhh!” she lamen­ted. “Only the misinformed can possibly be interested in me.” Genius, it seems, doesn’t always take to the spotlight.

11 thoughts on “Top Female Trend Follower: Leda Braga of BlueCrest

  1. Find one story in the media that is not simply reactionary to trend following up or down performance! For a refresher see my story with Barrons reporter many years ago in my book “Trend Following”. Where are the articles that talk of decades of above average performance?

  2. Hi again, Michael.

    I wanted your opinion on a few things related to this article.

    I am currently studying at University, doing a double degree in Economics and Finance.
    With high hopes, I am anticipating graduating from uni within two years and am already looking for job opportunities in fields such as those Leda Braga offers.

    Given the fact that her fund is purportedly a ‘trend following’ fund, I thought i would be well positioned to be employed at her firm.

    However, a check of the employment opportunities at Blue-trend, confirms that her research staff is comprised of PhD level quants. Not only that, but they are required to be in the top 15% of their respective academic peer performance.

    Needless to say, a PhD in that category is EXTREMELY difficult to achieve.

    It makes me wonder how we, as mere mortals, can hope to match the ‘trendfollowing’ performance of blue trend, without cutting edge quant analysis on par with bluetrend?

    I am genuine in my quest to understand how she can report that she is running a basic trend following fund, while also requiring that her researchers have PhDs for ongoing research.

    Something doesn’t fit here.

    If trend following is supposedly available and achievable by the masses, why does she ONLY hire top echelon quants to perform her trend research?

    I am depressed about this,as I have no hope of achieving the academic performance required to work at this company.

  3. The fact that the word “Quant” is used to describe her methods means that she is not a true trend follower. Anyone employing a large staff of PhD’s to formulate the math behind their strategy has Long Term Capital Management written all over it. Once the next “Black Swan” appears they’ll crash and burn just like every other quant based firm.

  4. As a guy who has seen a few things in the trend following space let me offer some insights:

    1. Many public money managers use marketing. Gee, shock! That means sometimes straightforward strategies are dressed up with “PhDs” and “changing markets” talk…but they are still trend followers. Some trader might change a nuance here or nuance there, or might indeed have a better edge, but its still trend following.

    2. I am still amazed at how many people don’t look at the performance data. Sure, read the “marketing”, but look at the data. It’s the story.

    3. My (2) books offer ways around having a PhD.

    4. I am not picking on any one in particular.

  5. Michael, I respect your view as an authority on the subject of trend following and enjoy reading your books and website; so much so that I’m constantly referring people to your material (especially the books “Trend Following” and “The Complete Turtle Trader”) when they ask how they can learn to be a successful trader.

    However, I also make my living in the trend following arena (as an actual trader) and the terms “quant” and “trend follower” can’t coexist, just like “contrarian” and “trend follower” can’t coexist. To suggest it’s all just marketing smoke and mirrors is searching for an excuse to cover the fact that they can’t. A trend follower touting quants to soothe their clients’ concern about performance isn’t going to smooth the results. When THE drawdown occurs do you really think the investors are going to leave their money there because they’ve employed a few professors?

    Quants are predictors, no matter how someone tries to spin it. I submit that the real reason the quants are there is to formulate when to stay OUT of the market. This isn’t trend following, it’s predicting. And while some might like to minimize this type of predicting as necessary, it is predicting and NOT true trend following. It may work for awhile, but someday the luck will run out and they’ll be on the wrong side of the trade and “kablooey”, just like every other quant firm.

    Only history will tell for sure, but I’d be watching for the “trend to bend” in that fund at some point and for the real trend followers to be there to pick up the money laying all over the ground from the implosion.

    I hope you’ll include it in one of your books if it happens.

  6. Jim,

    Very interesting observations. What of the view, however, that trend followers, quants and fundamentalists are all trend followers by degree. For example, at the risk of stating heresy on these pages, I’ve often thought of Warren Buffet as a “trend follower” with a 10- or 20-year horizon. He buys on the lows knowing that the long-term trend is upward. I do the same thing, but use month horizons. Others I know buy on dips/spikes in an upward or downward trend during their day-trading.

    The fluctuations we are willing to accommodate in our systems without reacting are determined by the general length of time contemplated when we see an investment. For Buffet it is decades, for me (and I think most followers of Michael)it is months/years, and for scalpers it is minutes.

    Just a thought…

  7. I have seen trend followers called quants. Let’s don’t assume all of these phrases have generally accepted definitions.

  8. Good point, Michael. It’s too easy to get lost in semantics when long-term results are all that matters.

Comments are closed.