Maverick Capital's human stock-pickers are shining, but quant strategies at Lee Ainslie's $8.8 billion fund are in the red and lagging their peers

Craig Barritt/Getty Images

Lee Ainslie's stock-pickers have beaten the firm's algorithms this year.

• $8.8 billion Maverick Capital's fundamental fund line - which includes three funds with different amounts of leverage - has beaten the average hedge fund through the first three quarters of 2019 while the firm's quant funds have lost money.
• The two quant funds have lost 5.9% and 9.8% through the end of September. The average quant fund has had positive returns of 6.25%, according to Hedge Fund Research.
• Human stock-pickers have been leading the pack this year, with big names like Bill Ackman and David Einhorn posting big numbers, while quants like Winton and Systematica have lagged behind.
• Click here for more BI Prime stories.

Maverick Capital's long-running fundamental stock-picking funds have outperformed peers in 2019. Meanwhile, the $8.8 billion manager's quant strategies are just hoping to break even by the end of the year.

An up-and-down first half of the year for quant funds - when managers like Winton, Systematica and Renaissance Technologies posted returns that veered from mediocre to poor - was made worse in September when a massive shift in momentum stocks hit many computer-driven funds. An investor document from Lee Ainslie's Dallas-based firm shows Maverick was not spared.

The document states that the two quant funds at Maverick, which manage a combined $930 million, lost 3.7% and 5.7% in the third quarter, and are down 5.9% and 9.8% for the year. That comes as the average quant has returned 6.25% through the end of September, according to Hedge Fund Research, less than the 8% return for the average equity hedge fund on the year.

See more: Izzy Englander just landed a quant team that was managing hundreds of millions for billionaire Michael Platt

But the firm's fundamental funds, which have been running since Ainslie started the firm in the early 1990s, have all made money this year. The Maverick LDC, the Maverick Levered, and the Maverick Long Enhanced posted returns of 10.4%, 20.4%, and 23.4%, respectively, through the end of September. Together, the three funds manage over $3.8 billion.

Maverick appears to have avoided the hits several of its stock-picking peers took when momentum crashed, as all of its fundamental funds were positive for the third quarter. Comparatively, fellow Tiger Cub Coatue fell by 5% thanks to the crash and Steve Cohen's Point72 lost money because of the out-of-the-blue market shift as well, according to Bloomberg.

Ainslie's quant funds have not matched the yearly returns of the firm's stock-picking strategies so far, the document shows. In the four years the two quant strategies have been running, annualized returns for both sits below 6%. The lowest annualized return for the fundamental strategies is 10.4%.

A spokesman for Maverick declined to comment.

See more: WorldQuant's Igor Tulchinsky just guaranteed his team 75% of last year's performance bonus to soothe nerves as quant funds get slammed