(Bloomberg) -- Paul Tudor Jones built his career on market savvy and a strong stomach for risk. Now, his gut is telling him to bet that data and the smarts of scientists can help his $10.6 billion hedge fund firm find profitable investment ideas.
Jones’s firm, Tudor Investment Corp., invested several million dollars late last year in a pair of startups led by entrepreneur Gil Syswerda and has partnered with them to use machine learning in investment decisions, according to people with knowledge of the matter.
Syswerda, who’s helped build a series of data-analytics companies since the 1990s, has been hiring a team of scientists to develop better ways to digest information such as satellite images, geolocation data and text, said the people, who asked not to be named because the information isn’t public.
“From global macroeconomic activity down to the performance of a single company, our customers benefit from insights into human activity that they have simply never seen before,” one of the companies, FeatureX, says on its website. Syswerda declined to comment on the venture, as did a spokesman for Greenwich, Connecticut-based Tudor.
Backing Syswerda’s companies is another signal from Jones, 62, that he sees computer-driven analysis as vital to his firm’s future. Tudor has also been adding scientists and mathematicians internally to develop data-visualization and trade-modeling tools that can aid money managers, who are still responsible for the final say in trades. Last year it moved its New York offices downtown to Astor Place, nearer technology giants such as Google Inc., Facebook Inc. and Twitter Inc. that have eschewed midtown Manhattan for Chelsea and the Village.
Jones, who founded his firm in 1980 and built it into an industry leader, is pushing analytical tools while seeking to placate clients ruffled by years of lackluster performance. Tudor’s main BVI Global macro fund declined 3.4 percent this year through Oct. 7, according to an investor report. A newer share class of the fund lost 2.4 percent.
FeatureX plans to create advanced tools to mine data for patterns that could then be used by humans to better understand markets. Syswerda’s other venture, Machine Alpha, will focus on devising financial trading models for Tudor, working in conjunction with an internal systematic trading unit led by Steve Evans, a longtime executive at the hedge fund firm.
Based in an office across the street from Massachusetts Institute of Technology in Cambridge, Massachusetts, FeatureX is also mining its environs for future talent. It’s currently seeking computer-vision and machine-learning specialists, as well as software engineers, according to its website. One draw: weekly invitation-only seminars focused on machine learning and replete with food, drink and “spirited conversation” on an academic paper in the field.
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