High-Flyer
{{Short description|Chinese quantitative hedge fund and AI company}}
{{Use dmy dates|date=December 2023}}
{{Infobox company
| name = Ningbo High-Flyer Quantitative Investment Management Partnership (Limited Partnership)
| native_name = {{lang|zh-CN|宁波幻方量化投资管理合伙企业（有限合伙）}}
| former_name =
| logo = High-Flyer.png
| type = Private
| industry = Hedge fund
Artificial intelligence
| predecessor =
| foundation = {{start date and age|df=y|2016|02}}
| location = Hangzhou, Zhejiang, China
| key_people = Lu Zhengzhe (CEO)
| founders = Liang Wenfeng
Xu Jin
Zheng Dawei
| aum = US$7 billion (October 2024)
| assets =
| subsid = DeepSeek
| num_employees = 160 (2021)
| homepage = {{URL|https://www.high-flyer.cn|high-flyer.cn}}
}}
Ningbo High-Flyer Quantitative Investment Management Partnership (Limited Partnership),{{efn|{{Lang-zh|s=宁波幻方量化投资管理合伙企业（有限合伙）}}}} doing business as High-Flyer,{{efn|{{Lang-zh|p=Huàn Fāng|s=幻方}}}} is a Chinese hedge fund company incorporated in February 2016.{{Cite web |title=九章资产与宁波幻方赚钱能力"爷孙对决"，有一种标准可一见高下 |url=https://www.cls.cn/detail/963150 |access-date=2025-01-28 |website=www.cls.cn}} Its legal registration address is in Ningbo, Zhejiang, and its main office location is in Hangzhou, Zhejiang. It is the founder and backer of AI firm DeepSeek.
History
High-Flyer was founded in February 2016 by Liang Wenfeng and two of his classmates from Zhejiang University.{{cite web |title=百亿幻方量化规模爆增的后遗症{{!}}界面新闻 |url=https://www.jiemian.com/article/3936228.html |website=www.jiemian.com |language=zh |access-date=1 March 2023 |archive-date=28 February 2023 |archive-url=https://web.archive.org/web/20230228134147/https://www.jiemian.com/article/3936228.html |url-status=live }}{{cite web |date=31 May 2020 |title=Billions Going to China's Quants Takes Fight to Global Funds |url=https://www.bloomberg.com/news/articles/2020-05-31/billions-flowing-to-china-s-quants-takes-fight-to-global-funds |url-status=live |archive-url=https://web.archive.org/web/20220525055515/https://www.bloomberg.com/news/articles/2020-05-31/billions-flowing-to-china-s-quants-takes-fight-to-global-funds |archive-date=25 May 2022 |access-date=1 March 2023 |website=Bloomberg News |language=en}}{{Cite web |last=Feng |first=Rebecca |title=Top Chinese Quant Fund Apologizes to Investors After Recent Struggles |url=https://www.wsj.com/articles/top-chinese-quant-fund-apologizes-to-investors-after-recent-struggles-11640866409 |access-date=1 March 2023 |website=WSJ |language=en-US |archive-date=28 February 2023 |archive-url=https://web.archive.org/web/20230228141016/https://www.wsj.com/articles/top-chinese-quant-fund-apologizes-to-investors-after-recent-struggles-11640866409 |url-status=live }} They generated ideas of algorithmic trading as students during the 2008 financial crisis. The company has two AMAC regulated subsidiaries, Zhejiang High-Flyer Asset Management Co., Ltd. and Ningbo High-Flyer Quant Investment Management Partnership LLP which were established in 2015 and 2016 respectively. The two subsidiaries have over 450 investment products.
In 2016, High-Flyer experimented with a multi-factor price-volume based model to take stock positions, began testing in trading the following year and then more broadly adopted machine learning-based strategies.
In 2019, High-Flyer set up a SFC-regulated subsidiary in Hong Kong named High-Flyer Capital Management (Hong Kong) Limited.{{Cite web |title=顶流量化私募集体出手！拿下这一牌照_财经_中国网 |url=http://finance.china.com.cn/money/fund/20211228/5717338.shtml |url-status=live |archive-url=https://web.archive.org/web/20230301122221/http://finance.china.com.cn/money/fund/20211228/5717338.shtml |archive-date=1 March 2023 |access-date=1 March 2023 |website=finance.china.com.cn}} It was approved as a Qualified Foreign Institutional Investor one year later.{{Cite web |title=起底私募"新通道"，幻方量化"曲线玩法"揭开盖子 |url=https://c.m.163.com/news/a/GK4SRCON05198NMR.html |url-status=live |archive-url=https://web.archive.org/web/20230228141121/https://c.m.163.com/news/a/GK4SRCON05198NMR.html |archive-date=28 February 2023 |access-date=28 February 2023 |website=163 |language=zh}}{{Cite web |last=财联社 |date=29 January 2021 |title=幻方量化"萤火二号"堪比76万台电脑？两个月规模猛增200亿 |url=https://finance.sina.com.cn/money/smjj/2021-01-29/doc-ikftpnny2786439.shtml |url-status=live |archive-url=https://web.archive.org/web/20230301123431/https://finance.sina.com.cn/money/smjj/2021-01-29/doc-ikftpnny2786439.shtml |archive-date=1 March 2023 |access-date=1 March 2023 |website=Sina}} In the same year, High-Flyer established High-Flyer AI which was dedicated to research on AI algorithms and its basic applications.{{Cite web |last=Ottinger |first=Lily |date=December 9, 2024 |title=Deepseek: From Hedge Fund to Frontier Model Maker |url=https://www.chinatalk.media/p/deepseek-from-hedge-fund-to-frontier |access-date=2024-12-28 |website=ChinaTalk |language=en |archive-date=28 December 2024 |archive-url=https://web.archive.org/web/20241228030725/https://www.chinatalk.media/p/deepseek-from-hedge-fund-to-frontier |url-status=live }}
In 2020, High-Flyer established Fire-Flyer I, a supercomputer that focuses on AI deep learning. It cost approximately 200 million Yuan. In 2021, Fire-Flyer I was retired and was replaced by Fire-Flyer II which cost 1 billion Yuan. It contained 10,000 Nvidia A100 GPUs.{{Cite web |date=27 January 2025 |title=一股"东方神秘力量"登上新闻联播！吓坏美国，硅谷连夜破解 |url=https://www.eet-china.com/mp/a379073.html |website=EE Times China}} By this year all of High-Flyer's strategies were using AI which drew comparisons to Renaissance Technologies.{{cite web |last1=McMorrow |first1=Ryan |date=9 June 2024 |title=The Chinese quant fund-turned-AI pioneer |url=https://www.ft.com/content/357f3c68-b866-4c2e-b678-0d075051a260 |url-status=live |archive-url=https://archive.today/20240610121218/https://www.ft.com/content/357f3c68-b866-4c2e-b678-0d075051a260 |archive-date=10 Jun 2024 |access-date=19 July 2024 |website=Financial Times}}
At the end of 2021, High-Flyer put out a public statement on WeChat apologizing for its losses in assets due to poor performance.{{cite web |date=29 December 2021 |title=China's Top Quant Hedge Fund High-Flyer Apologizes for Loss |url=https://www.bloomberg.com/news/articles/2021-12-29/china-s-top-quant-hedge-fund-high-flyer-apologizes-for-losses |url-status=live |archive-url=https://web.archive.org/web/20221205211025/https://www.bloomberg.com/news/articles/2021-12-29/china-s-top-quant-hedge-fund-high-flyer-apologizes-for-losses |archive-date=5 December 2022 |access-date=1 March 2023 |website=Bloomberg News |language=en}} The performance of over 100 of its investment products declined by over 10%. High-Flyer stated that its AI models did not time trades well although its stock selection was fine in terms of long-term value. The models would take on higher risk during market fluctuations which deepened the decline. In addition the company stated it had expanded its assets too quickly leading to similar trading strategies that made operations more difficult. Up until this point, High-Flyer produced returns that were 20%-50% more than stock-market benchmarks in the past few years.
In March 2022, High-Flyer advised certain clients that were sensitive to volatility to take their money back as it predicted the market was more likely to fall further.{{Cite web |date=15 March 2022 |title=Quant Giant's Rare Advice to Pull Cash Shows China Market Woes |url=https://www.bloomberg.com/news/articles/2022-03-14/quant-giant-s-rare-advice-to-pull-cash-shows-china-market-woes |access-date=2025-01-06 |website=Bloomberg News |archive-date=31 March 2022 |archive-url=https://web.archive.org/web/20220331170817/https://www.bloomberg.com/news/articles/2022-03-14/quant-giant-s-rare-advice-to-pull-cash-shows-china-market-woes |url-status=live }}
In April 2023, High-Flyer announced it would form a new research body to explore the essence of artificial general intelligence. However it would not be used to perform stock trading.{{Cite web |title=[Exclusive] Chinese Quant Hedge Fund High-Flyer Won't Use AGI to Trade Stocks, MD Says |url=https://www.yicaiglobal.com/news/exclusive-chinese-quant-fund-high-flyer-will-not-use-agi-to-trade-stocks-managing-director-says |url-status=live |archive-url=https://web.archive.org/web/20231231030712/https://www.yicaiglobal.com/news/exclusive-chinese-quant-fund-high-flyer-will-not-use-agi-to-trade-stocks-managing-director-says |archive-date=31 December 2023 |access-date=2023-12-31 |website=Yicai Global |language=en}} This organization would be called DeepSeek.{{Cite web |last=Ottinger |first=Lily |date=December 9, 2024 |title=Deepseek: From Hedge Fund to Frontier Model Maker |url=https://www.chinatalk.media/p/deepseek-from-hedge-fund-to-frontier |access-date=2024-12-27 |website=ChinaTalk |language=en |archive-date=28 December 2024 |archive-url=https://web.archive.org/web/20241228030725/https://www.chinatalk.media/p/deepseek-from-hedge-fund-to-frontier |url-status=live }}{{Cite web |last=Allen |first=Gregory C. |date=March 7, 2025 |title=DeepSeek, Huawei, Export Controls, and the Future of the U.S.-China AI Race |url=https://www.csis.org/analysis/deepseek-huawei-export-controls-and-future-us-china-ai-race |website=Center for Strategic and International Studies}}
From 2018 to 2024, High-Flyer has consistently outperformed the CSI 300 Index. However, after the regulatory crackdown on quantitative funds in February 2024, High-Flyer's funds have trailed the index by 4 percentage points.
In July 2024, High-Flyer published an article in defending quantitative funds in response to pundits blaming them for any market fluctuation and calling for them to be banned following regulatory tightening. High-Flyer stated it held stocks with solid fundamentals for a long time and traded against irrational volatility that reduced fluctuations.{{Cite web |date=19 July 2024 |title=China Quants Defend Sector Amid Calls to Ban Algorithmic Trades |url=https://www.bloomberg.com/news/articles/2024-07-19/china-quants-defend-sector-amid-calls-to-ban-algorithmic-trades |access-date=2025-01-06 |website=Bloomberg News}}
In October 2024, High-Flyer shut down its market neutral products, after a surge in local stocks caused a short squeeze.{{Cite news |date=2024-10-21 |title=Top China Quant Winds Down Strategy Pummeled by Market Rally |url=https://www.bloomberg.com/news/articles/2024-10-21/top-china-quant-winds-down-strategy-pummeled-by-market-rally |access-date=2024-11-21 |work=Bloomberg News |language=en}}
Corporate affairs
High-Flyer's investment and research team had 160 members as of 2021 which include Olympiad Gold medalists, internet giant experts and senior researchers.{{Cite news |date=31 August 2021 |title=China Hedge Funds Pay $300,000 to Beat Wall Street to Best Graduates |url=https://www.bloomberg.com/news/articles/2021-08-31/china-quants-pay-300-000-to-beat-wall-street-to-best-graduates |url-status=live |archive-url=https://web.archive.org/web/20210915004543/https://www.bloomberg.com/news/articles/2021-08-31/china-quants-pay-300-000-to-beat-wall-street-to-best-graduates |archive-date=15 September 2021 |access-date=28 February 2023 |work=Bloomberg News |language=en}} It has been trying to recruit deep learning scientists by offering annual salaries of up to 2 million Yuan.
In 2022, the company donated 221 million Yuan to charity as the Chinese government pushed firms to do more in the name of "common prosperity".{{Cite news |date=11 January 2023 |title=China Quant Fund Donates $53 Million as Xi Stresses Philanthropy |url=https://www.bloomberg.com/news/articles/2023-01-11/china-quant-fund-donates-53-million-as-xi-stresses-philanthropy |url-status=live |archive-url=https://web.archive.org/web/20240316030641/https://www.bloomberg.com/news/articles/2023-01-11/china-quant-fund-donates-53-million-as-xi-stresses-philanthropy |archive-date=16 March 2024 |access-date=28 February 2023 |work=Bloomberg News |language=en}}
In March 2023, it was reported that High-Flyer was being sued by Shanghai Ruitian Investment LLC for hiring one of its employees.{{cite web |date=7 March 2023 |title=Hedge Fund Feud Over China Quant Trader Shows Growing Talent War |url=https://www.bloomberg.com/news/articles/2023-03-07/hedge-fund-feud-over-china-quant-trader-shows-growing-talent-war |url-status=live |archive-url=https://web.archive.org/web/20230309095922/https://www.bloomberg.com/news/articles/2023-03-07/hedge-fund-feud-over-china-quant-trader-shows-growing-talent-war |archive-date=9 March 2023 |access-date=7 March 2023 |website=Bloomberg News |language=en}} The rival firm stated the former employee possessed quantitative strategy codes that are considered "core commercial secrets" and sought 5 million Yuan in compensation for anti-competitive practices. In May 2023, the court ruled in favour of High-Flyer.{{Cite news |date=2023-05-25 |title=China Hedge Fund Loses Case Against Top Quant Who Joined Rival |url=https://www.bloomberg.com/news/articles/2023-05-25/china-hedge-fund-loses-case-against-top-quant-who-joined-rival |url-status=live |archive-url=https://web.archive.org/web/20240316030704/https://www.bloomberg.com/news/articles/2023-05-25/china-hedge-fund-loses-case-against-top-quant-who-joined-rival |archive-date=16 March 2024 |access-date=2023-12-31 |work=Bloomberg News |language=en}}
In October 2023, High-Flyer announced it had suspended its co-founder and senior executive Xu Jin from work due to his "improper handling of a family matter" and having "a negative impact on the company's reputation", following a social media accusation post and a subsequent divorce court case filed by Xu Jin's wife regarding Xu's extramarital affair.{{Cite web |last=Zhen |first=Summer |date=October 27, 2023 |title=Top China hedge fund suspends founder, cites reputational hit from family matter |url=https://www.reuters.com/article/idUSL4N3BX0GO/ |website=Reuters}}{{Cite web |last=市场资讯 |date=2023-10-27 |title=幻方量化深夜处置婚外事件：涉事创始人停职，量化圈再被带到风口浪尖 |url=https://finance.sina.com.cn/roll/2023-10-27/doc-imzsnwua4352216.shtml |access-date=2025-01-25 |website=finance.sina.com.cn}}
See also
Notes
{{notelist}}
References
{{reflist}}
External links
- {{official website|https://www.high-flyer.cn}}
- {{official website|https://www.highflyercapital.com/|name=High-Flyer Capital Management (Hong Kong) Limited}}
{{hedge funds}}
{{authority control}}
Category:Artificial intelligence companies
Category:Chinese companies established in 2015
Category:Companies based in Hangzhou
Category:Financial services companies established in 2015
Category:Hedge fund firms in China