MONEY MANAGEMENT

Victory Capital acquires minority stake in machine-learning hedge fund Cerebellum Capital

Victory Capital Holdings acquired a minority ownership stake in hedge fund manager Cerebellum Capital.

Terms of the deal and the size of the stake are not being disclosed, said Conrad Gann, Cerebellum’s chief financial officer and chief operating officer, in an interview.

Cerebellum is a specialist in applying artificial intelligence in the form of machine learning to investment management strategies based on 30 years of collective research from intelligent technology scientists including the firm’s co-founders, David Andre, the current CEO, and Astro Teller, a former CEO who now is CEO of Google X.

"We believe artificial intelligence represents a tremendous opportunity to augment and evolve active investment management," said David Brown, Victory Capital’s chairman and CEO, in a company news release.

Cerebellum will continue to operate independently under its own name with the addition of Mr. Brown to the firm’s board to support and advise on the smaller firm’s continued growth, Mr. Gann said.

Cerebellum will work with Victory Capital’s 11 investment units to find “strategic synergies” to enhance existing investment strategies and to develop new investment approaches, Mr. Gann said.

Victory Capital manages or advises on a total of $51.4 billion in multiple asset classes, the news release said.

Cerebellum Capital manages $104 million, according to its most recent ADV filing with the Securities and Exchange Commission. The firm is a subadviser managing a quantitative equity market-neutral strategy sleeve for the Blackstone Multi-Strategy Diversified Fund, a UCITS fund managed by Blackstone Alternative Investment Funds, according to the fund’s June 30 performance report.