Andy Chakraborty is the Portfolio Manager of Duo Reges Capital Management. Andy founded Duo Reges in 2018, stemming from his experience in tech at Microsoft and Amazon, focused on problems where models failed and his passion for the markets. Duo Reges is a long/short quantamental equity hedge fund that seeks to exploit human-machine collaboration gaps created by rule or model-based trading.
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“I've always had a passion for capital markets and quantitative work, and one thing I learned is even the most world-class models fail. Big companies like Amazon or Microsoft, which handle substantial complex technical systems, work 99.9% of the time. However, how they fail has a lot to do with how people design stuff. Machines start to create weird behaviors concerning themselves. Some machine learning systems or bots get exploited or hacked because nothing is intended to be right 100% of the time, or you become overfitting. So thinking about these gaps, there was an opportunity in it that led me to the market.
To understand human financial behaviors, you need to find their mathematical signatures and profile them using data science techniques and clustering. It’s about finding the patterns of failure and the biases in the market. You're either trying to get in front of them if they're going to be right or take the other side of the trade if they're going to be wrong. I’ve talked to a few quant strategies, and there have been debates about the human element. Sometimes I've had managers who let the machine do what it does and take the human part out of it. And then you talk to other guys who say that the machine does a lot, but there needs to be an active approach at the last mile. But I think that you can't eliminate the human element. You should lean into it, capture the point of failure, and use that as your major source of alpha.
Our goal is to help clients understand equity long, short, and quantitative hedge funds. So it's been generally low correlation and low harmful exposure. Some clients with fiduciaries investing for their book need to decide if they will be more model or rule-based investors. They must be prepared and have an AI or an ESG investment strategy. So whether they're investing with us or just thinking about themselves, they need to know these things because they owe it to the people they're investing for.”
Andy Chakraborty, Portfolio Manager
425 - 270 - 1951
www.duoreges.com
Duo Reges means “two kings” in Latin. We aspire to balance the trade-offs or dualities inherent to the investment process to the benefit of our clients:
Market Dynamics: Behavioral vs. Traditional Economics
Short term vs. Long term
Capital Market Reactions vs. Governmental Regulatory Actions
New vs. Traditional Methodologies
Risk vs. Return
We employ a hybrid quantitative/fundamental approach, leveraging both machine and human strengths.
Our leadership team has complementary backgrounds in analytics & data science as well as private equity and investments with an average of 20 years of experience.
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