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Philosophy

Acadian believes that markets are inefficient, and that such inefficiencies are caused in part by systematic mistakes in investor behavior, as well as structural features of markets. To that end, Acadian applies fundamental insights in an objective and regimented manner to find attractive investment opportunities and attempt to exploit these mispricings.  We believe that securities and markets have many attributes that are related to potential outperformance, and that a successful investment approach must be multi-faceted and adaptable.  

Investment

Acadian's philosophy is the result of decades of fundamental insight tested by rigorous statistical and economic analysis. We believe our experienced team and disciplined approach, coupled with the technical ability to maintain and analyze large volumes of data, allows us to apply fundamental insights in a highly systematic and objective way, while remaining adaptive to changing market environments.

We leverage more than 70 individual indicators which have long-term signals linking them to potential excess returns. These are combined into 20 aggregate factors which can be classified according to four key categories of Value, Quality, Growth and Technical. Each of them is grounded in sound investment theory, and supported by specific observations from a range of disciplines including statistical analysis, fundamental equity insights, economic science and behavioral finance. These factor groups provide a diverse set of characteristics which we believe also have the benefit of working in different time periods and market environments. Acadian's dynamic factor weighting process attempts to maximize the value provided by each factor at regular intervals, recognizing the need to be both anchored in historical observation yet adaptable to changing market environments.

Risk

Risk control is central to the way Acadian manages our strategies and our firm. While understanding portfolio risk relative to expected return is of great importance to portfolio managers, Acadian also manages risk in a more holistic sense. The open, collegial approach to research and portfolio strategy, and the great value placed on the diverse backgrounds of our investment team members both help mitigate group think within the firm. Acadian's systematic approach both adds redundancy in an effort to help control operational risk but also, importantly, insulates our portfolios from the behavioral biases that many investors exhibit. Similarly, our multi-factor framework provides a diverse set of signals that our research has shown to have the potential to add value, offering a diversified, risk controlled, portfolio approach to forecasting excess return. Finally, by focusing on the broadest possible universe of investible stocks, we seek to mitigate the risk of being concentrated in any one particular industry, region or country.

Technology

Acadian's commitment to world-class data infrastructure, technical support, and process management we believe allows us to remain at the forefront of innovation in asset management while maintaining the necessary risk controls and discipline of process that are critical to our success in meeting our clients' goals. We leverage technology in an effort to ensure timely information, efficient global trading, and cutting-edge analysis, always employing these in concert with a strong framework of human review and oversight. Technology is also a key component in our client communications and reporting, to transparently articulate our process, portfolio positioning and performance to clients. Our philosophy is based on a continuous integration model which requires constant oversight and development, and allows us to provide ongoing process enhancements by leveraging the latest technology.

Product Development

Acadian has a proven track record of, and ongoing commitment to designing new strategies in an effort to meet the needs of our clients. In a fast-moving industry we strive to remain at the leading edge of investment thinking and practice.  Our collegial and creative culture and our commitment to collaborating with clients are important drivers in our approach to strategy development. Understanding the evolving needs of our clients, and providing innovative ways to meet those needs, are critical elements of our approach.

Research Clients Team

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