Faheem Osman – Commodity QIS: An Under-Appreciated Source of Systematic Returns? (S7E29)
Episode publishedPodcast: Flirting with ModelsFlirting with Models
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Alright. Faheem, are you ready?
Yes. We're ready.
Alright. Three, two, one. Let's jam. Hello, and welcome, everyone. I'm Corey Hofstein, and this flirting with models, the podcast that pulls back the curtain to discover the human factor behind the quantitative strategy.
Corey Hofstein is the cofounder and chief investment officer of Newfound Research. Due to industry regulations, he will not discuss any of Newfound Research's funds on this podcast. All opinions expressed by podcast participants are solely their own opinion and do not reflect the opinion of Newfound Research. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Newfound Research may maintain positions and securities discussed in this podcast. For more information, visit thinknewfound.com.
In this episode, I speak with Fahim Osman, managing director and global head of QIS structuring at Macquarie Group. Faheem has spent nearly two decades inside major investment banks. First at Citi, where he spent about ten years on the commodities trading and structuring side. And now at Macquarie where he's built out their cross asset QIS business. Commodities though remain firmly in the DNA of what Macquarie does and it's where Faheem cuts his teeth. We spend the bulk of our conversation exploring commodity QIS as a distinct and in Vahim's view underappreciated source of systematic returns.
Thank you so much for having me. I'm really excited to be chatting with you today.
Now Faheem, you've spent the better part of two decades working at major banks. You were at Citi for about ten years and now Macquarie and you've really watched QIS and specifically multi asset QIS evolve from the inside. Maybe to set the table for this whole conversation for listeners who aren't familiar with what cross asset QIS structuring teams actually do. How would you describe your day to day world?
At a very high level, cross asset QIS structuring sits at the intersection of markets, research and clients. So really, our job is to find an innovative systematic solution to real investment problems. And so we take ideas and we turn them into strategies that clients can allocate their exposure to. So my background, I studied electronic engineering. So what I really enjoy the most is problem solving and designing things. And so the idea for a strategy can come from lots of places. So if you think about academic research or something that we're observing in the market, or very often it comes f
Let's stick with that theme of change for a second because this is an area of cross asset QIS that has changed considerably over the last twenty years. Not just in what strategies exist, but how they're built and risk managed and combined. I presume all coming from growth in the capabilities and market access and even from what clients are ultimately now demanding. Can you talk a little bit about what the most significant shifts you've seen in this space are over the last twenty years and maybe contrast that with what stayed the same?
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