June 23 (Bloomberg) -- Credit Suisse Group AG, Switzerland’s second-largest bank, is starting a $500 million systematic-trading group within its asset-management business after picking Mika Toikka to lead the effort.
The group will begin with about 20 traders, analysts and other investment employees and will trade across liquid markets, the company said today in a statement. Large U.S. stocks and commodity futures, where contracts are easy to sell, are among the assets the team will trade.
“There is great demand for liquid investments with transparency right now,” Toikka, 44, most recently global head of risk and strategy at the investment bank’s proprietary- trading business, said in a telephone interview. The systematic- trading group is based in New York and has a presence in Zurich and may expand to other locations, he said.
Systematic trading relies on computer models and technical analysis of chart patterns to determine when to buy and sell assets. Hedge funds that focus on the strategy lost 1.2 percent this year through May, compared with a 2 percent gain for the industry, according to Hedge Fund Research Inc., a Chicago-based research firm.
Credit Suisse, based in Zurich, is hiring hedge-fund managers and former proprietary traders from rival banks, the company said.
“We are looking to attract top-tier talent,” Toikka said in the interview.
Toikka has worked for Credit Suisse for 11 years, including a stint as global head of equity derivatives strategy within the investment bank.
The $500 million comprises seed capital from Credit Suisse and money from the bank’s existing quantitative group within its asset-management unit, according to the statement.
Credit Suisse is also forming a systematic-trading advisory board for the effort, according to the statement.
The board is made up of Robert Engle, a Nobel Prize-winning economist and professor at New York University; Olivier Ledoit, the former head of statistical arbitrage at Credit Suisse’s proprietary-trading group in Europe; and Andrew Mullhaupt, a research professor at Stony Brook University in Stony Brook, New York, who previously worked at hedge funds Renaissance Technologies Corp. and SAC Capital Advisors LP, according to the statement.
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