Cliff Asness

Clifford Scott Asness (born October 17, 1966) is an American hedge fund manager and the co-founder of AQR Capital Management.

In 1988, Asness graduated summa cum laude from the University of Pennsylvania, from which he received bachelor's degrees double-majoring in computer science and finance as part of the Jerome Fisher Program in Management and Technology (M&T).

Asness's interest in finance and portfolio management began while he worked a research assistant in the Finance Department at Wharton, where he learned to use "coding computer programs" to analyze markets" and "test economic and financial theories".

In 1989, Asness enrolled at the University of Chicago Booth School of Business, where he received his MBA with high honors in 1991, and his PhD in finance in 1994.

Asness started his career in 1990, when he was 24 and still a PhD student.

In the early 1990s, he had left academia, to the regret of his mentor, to become manager of Goldman Sachs Asset Management's (GSAM) "new quantitative research desk."

He invited two friends from his cohort at the University of Chicago to join him at GSAM.

Together, they began "developing models to evaluate risk in currencies, bonds and entire economies."

While the "idea of factors" came from Fama and French, it was first "put into practice" in the late 1990s by Asness, according to The Economist.

Asness and his team at GSAM built on Fama and French's idea of factors, and combined their work with insights he had gained from his own PhD research.

At Chicago, Asness was the teaching assistant (TA) for his dissertation adviser, Nobel laureate Eugene Fama — who was also Asness' mentor — and the economist, Kenneth French, who were both influential and widely-respected empirical financial economists, had established the foundations of their Fama–French three-factor model in 1992.

Fama and French had contrasted value stocks with growth stocks.

Since Fama and French's inception of value stocks, "quants have designed algorithms that can scour market data" looking for "factors".

Asness' doctoral dissertation was on "the performance of momentum trading, buying stocks with rising prices".

Asness asserted that profits consistently beating market averages were attainable by exploiting both value and momentum.

Asness concept of value was referred to in the context of fundamental analysis as a way of assessing the true worth of a security.

His use of the concept of momentum referred to betting that the value will continue to go up or down as it did in the recent past.

While he did not originate these concepts, Asness was credited with being the first to compile enough empirical evidence across a wide variety of markets to bring the ideas into the academic financial mainstream.

In 1995, Asness persuaded a few partners at Goldman to provide him with an initial US$10-million investment to employ the computer-driven models that his team had developed, to invest in the market.

When the $10 million initial investment reached $100 million, Goldman opened the fund to the public—the Goldman Sachs Global Alpha Fund.

Global Alpha, a systematic trading hedge fund was one of the earliest "quant vehicles" in the industry.

The fund became known for high-frequency trading and furthered the careers of Asness and Mark Carhart.

Asness and his team used complicated computerized trading models to first locate underpriced equities, bonds, currencies, and commodities and then use short selling to take advantage of upward or downward price momentum.

The fund was designed to make money regardless of the direction the market was moving.

Asness worked as GSAM manager until 1997, when he and some members of the GSAM team, left to start their own quantitative hedge fund.

In 1998 in New York, when he was 31-years old, Asness, David Kabiller, John Liew, and Robert Krail, co-founded AQR Capital Management, a "quantitative hedge fund firm."

In 2002, Asness made $37 million, and in 2003, he made $50 million.

In 2004, AQR moved its headquarters from New York to Greenwich, Connecticut.

The Wall Street Journal described Asness and Carhart as "gurus" who managed Global Alpha, a "big, secretive hedge fund"—the "Cadillac of a fleet of alternative investments" that had made millions for Goldman Sachs by 2006.

By 2007, at its height, Global Alpha was "one of the biggest and best performing hedge funds in the world" with more than $12 billion assets under management (AUM).

AQR—Applied Quantitative Research—suffered losses during both the "2007 quant meltdown" and the 2008 financial crisis

The quant fund had declined significantly by mid-2008, and continued its decline to $1 billion AUM through 2011.

By the end of 2010, AQR had $33 billion assets under management (AUM).

An October 2010 Bloomberg article, described AQR as a "quantitative investment firm" that used "algorithms and computerized models to trade stocks, bonds, currencies and commodities."

Global Alpha was shutdown in the fall of 2011.

In 2016, Connecticut's State Bond Commission gave $35 million in financial aid to AQR, as part of a "broader move by the Connecticut government to persuade companies", including Bridgewater Associates, the biggest hedge fund in the world, to remain in Connecticut.

According to an April 2020 Forbes profile, Asness' estimated net worth was $2.6 billion.

Asness is Jewish and was born to a Jewish family, in Queens, New York, the son of Carol, who ran a medical education firm, and Barry Asness, an assistant district attorney in Manhattan who was a former Golden Gloves boxer.

His family moved to Roslyn Heights, New York, when he was four.

He attended the B'nai B'rith Perlman Camp, and graduated from Herricks High School.