AlphaQuest Founder Lost Control of $2B Quant Fund, Investor Claims

AlphaQuest founder Nigol Koulajian admitted to losing control of trading operations at his $2 billion quantitative hedge fund prior to announcing its closure, an institutional investor alleged in a lawsuit filed this week. The investor, which has not been publicly identified, claims that Koulajian's admission came before the fund's official announcement of its impending shutdown. This revelation suggests a potential loss of oversight in the fund's complex trading strategies.

The lawsuit, filed in a New York court, details accusations that Koulajian stepped down as chief investment officer in late 2023, a move that coincided with significant trading losses. The investor further claims that Koulajian acknowledged his inability to manage the fund's trading effectively, leading to the decision to liquidate assets and return capital to investors. AlphaQuest managed approximately $2 billion in assets under management at its peak.

AlphaQuest, known for its sophisticated quantitative trading models, faced mounting pressure from the alleged trading control issues. The fund's planned shutdown marks a significant event in the quantitative hedge fund industry, highlighting the risks associated with highly automated and complex trading systems. The lawsuit seeks to recover losses incurred by the institutional investor due to the alleged mismanagement and subsequent fund closure.