CircleUp has lured away Fangzhou ‘Ark’ Shi from AQR Capital Management. Shi’s hiring fortifies CircleUp’s push into quant investing in private equity.

Christine Idzelis filed this report for Institutional Investor:

Shi joined the San Francisco-based firm’s quant research group on October 24, according to Neil Constable, CircleUp’s chief investment officer. He will report to Ying Wang, portfolio manager and head of systematic research, who also previously worked for AQR.

CircleUp has been attracting talent with experience at well-known quant firms as it seeks capital for a systematic fund targeting consumer companies in private markets. Constable, who joined the firm in July as its first CIO, left his role overseeing GMO’s global equity portfolios to be an early mover in a new area of quant investing.

“The private markets are basically in the same state, from the point of view of data, as the public markets were thirty years ago,” Constable said. “The data has finally become available in certain corners of the private market.”

Institutional Investor reported last year that CircleUp, co-founded by Ryan Caldbeck and Rory Eakin, was aiming to raise about $375 million for a systematic private equity fund that will buy minority stakes in about 150 companies. The fundraising officially started in the middle of the third quarter of 2019, according to Constable.

He said CircleUp has received commitments from existing investors in the firm’s credit and discretionary strategies. The firm is also in late-stage conversations with “anchor” investors who can write large checks, he said, aiming to hold a first close for the systematic fund by early next year.
Tackling quantitative investing in private markets is drawing people to CircleUp who have an “entrepreneurial nature,” and want to work with data others don’t have, according to Constable.