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Systematic Investing

Our mission is to deliver direct access to diversifying Hedge Fund Strategy Risk Premia ("HRP"), a sub-set of Alternative Risk Premia, in a transparent, liquid, and predominantly systematic format.



We define “event-driven” as strategies seeking to profit from investments in companies experiencing a material change in their ownership or capital structure.

  • The opportunity set includes investing in stocks undergoing mergers, as well as investing in companies engaging in major stock or debt repurchases, divestitures, spin-offs, and other key events in the corporate life-cycle
  • One of the hallmarks of event-driven strategies is habitat rotation, which describes how owners of a stock (typically fundamental investors) will seek to quickly reduce their ownership position due to a corporate event. Event-driven investors who are willing to accumulate shares during this habitat rotation are often able to earn a positive risk premia
  • Our HRP focus is to efficiently extract the risk premia associated with event-driven strategies
  • Our event-driven HRP strategies currently include Systematic Risk Arbitrage and Systematic SPAC

Relative Value

We define “relative value” as strategies seeking to profit from the relative mispricing of related assets.

  • The opportunity set includes the relationship of different instruments related to a single issuer as well as the trading relationship of instruments of multiple issuers
  • Relative value strategies can be implemented across the opportunity set via a systematic yet practice-based approach, focusing on theoretical and historical pricing relationships
  • Our HRP focus is to efficiently extract the risk premia associated with these strategies
  • Our relative value HRP strategies currently consist of Systematic Convertible Arbitrage


We define “quantitative” as those strategies seeking to profit from statistical anomalies.

  • The opportunity set includes investing (long or short) in stocks, futures, and other instruments
  • Human behavioral biases and market structural constraints often combine to generate anomalies, which quantitative investors can spot and take advantage of
  • Our HRP focus is to efficiently extract the risk premia associated with quantitative strategies
  • Our quantitative HRP strategies currently consist of Equity Statistical Arbitrage

The Opportunity

Hedge fund strategy returns have been gradually decomposed over time, but a key component has been missing, until now...

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HFP 4 by 4 boxes
HFP 4 by 4 boxes

HRP is a component of the Alternative Risk Premia universe, distinct from Style Premia. At Magnetar we have focused on the development and extraction of HRP.

We define HRP as the return streams derived from exposure to specific hedge fund strategies that are extractable via a targeted systematic approach.

Comes from systematic exposure to a hedge fund strategy. E.g., risk arbitrage investors receive a return analogous to a "reinsurance" premium for taking on deal break risk.

Comes from manager skill. E.g., the risk arbitrage manager must select the transactions most likely to close relative to the market-implied break probability.

Our Practitioner's Approach


Practitioner Lens refined over decades of active management.


Combination of publicly available, self-sourced, and self-generated.


Isolation of Practitioner-based, data-affirmed risk premia filters.

Magnetar's Approach

Augmented rule parameters target only the most attractive opportunities in which the risk premia compensation is sufficient.

Blunt Force Approach

Broad rule parameters often fail to delinate opportunities with sufficient risk premium vs. insufficient risk premium compensation.

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