GREENWICH, Conn. — In just eight years, AQR Capital Management LLC has become a darling of the institutional world, with $25 billion under management to prove it.
AQR's assets under management grew 65% last year, to $20 billion. Last year, AQR won mandates of $200 million or more each from the likes of the $210 billion California Public Employees' Retirement System, the $52.2 billion Minnesota State Board of Investment and the $54.8 billion Public School Employees' Retirement System of Pennsylvania.
The firm has snared another $5 billion so far this year, including a subadvisory mandate of A$3.95 billion (US$3 billion) in core global equities from BT Financial Group Pty. Ltd., Sydney. And the new business pipeline is bursting for the rest of the year.
AQR's meteoric rise prompted one consultant who requested anonymity to call the firm "the next Bridgewater." Bridgewater, like AQR, has benefited hugely from portable alpha strategies. Bridgewater closed its alternative investment funds except to portable alpha clients last year (Pensions & Investments, Dec. 12) and managed $160 billion as of May 1.
But unlike Bridgewater, which took 20 years to reach its current size, AQR seemed destined from the outset to succeed. Clifford S. Asness, Robert J. Krail and John M.S. Liew got their doctorates together at the University of Chicago and went on to join Goldman Sachs Asset Management in New York, where they worked in the quantitative research group. Mr. Asness was managing director and director of research; Mr. Krail was vice president, portfolio manager, and developed global stock selection models; Mr. Liew was a vice president and developed global asset allocation models.
The trio managed $7 billion in hedge fund and other strategies when they left to form AQR. They brought with them David G. Kabiller, vice president, pension services group at parent Goldman Sachs & Co., New York.
The roles of the founders, who all carry the title of founding principal (except for Mr. Asness, who also is managing principal), haven't changed since their Goldman days, Mr. Kabiller said. Mr. Asness also serves as chief executive/chief investment officer. Mr. Kabiller heads business development.