MC Insider | Take notes, then take off, pruning the portfolio, and now quants want to take charge!

The founders of a unicorn, who were on their way out, engaged with several VCs and family offices during their last few days to discuss an idea for a consumer play. What they didn’t tell these investors is that this is an idea for their new company, which they’ll start after leaving their current firm. The investors had no clue about their decision to leave and exchanged notes and tips, thinking they were brainstorming ways to help the current firm. But the founders happily took notes and learnt about competitors. Guess they were in stealth mode all along.

A well-known financial services firm is keen to shed some flab. There are whispers on Deal Street that the sale process for one of its units, which doesn’t fit under the group’s umbrella anymore, has been launched, and we hear early bids are likely before the end of the month. The same segment saw healthy participation from marque investors in a recent transaction. So, will there be a rub-off effect?

Word on the street is that some high-frequency traders want to enter the broking space. The regulator has recently reworked algorithmic trading norms to make it more accessible to retail investors. MC Insider learns that this is the opportunity that these HFTs have been looking to tap. They recognise that retail investors may have developed a taste for big returns, and in a challenging market, they could provide a superior product. When brokers are hesitating to invest big in the algo business, with the hit they have recently taken on their revenue from regulatory changes, HFTs may seize a chunk of the opportunity. Surely, looks like the quants are done playing second fiddle —they’re ready to write the rules and the code.