Looking back on a major donation from QFS founder Grossman and a BlackRock prediction

January 24, 2012   Rob Copeland

AR also revisits the rise of Phoenix.

One year ago
»» QFS Asset Management founder Sanford Grossman donated an unspecified stake of the firm to his alma mater, the University of Chicago. The quantitative investor earned his B.A., M.A. and Ph.D. in economics from the university and was a professor there from 1981 to 1985. He is also a member of the board and its investment committee.

"The success of QFS has been based upon the application of the scientific tools that I was taught as a student at the University of Chicago," Grossman said in a statement at the time. "I can think of no better way to express my thanks to the University, than by giving the University an opportunity to benefit from the continued success of QFS." In return, Chicago created the new Grossman Institute for Quantitative Biology and Human Behavior.

The donation came as the $1.4 billion Greenwich, Conn. firm began reporting mixed results. The QFS Currency Program, by far the firm’s largest, earned 5.54% in 2011, compared with a 2.98% drop for the AR Managed Futures Index. But the QFS Fixed Income Fund fell 4.52% compared with a 6.17% gain for the AR Fixed Income Index, while the QFS Macro Program gained 0.27% compared with a 1.07% gain for the AR Macro Index.

QFS did not immediately respond to a request for comment.

See also:
QFS picks up AR Award

Five years ago
»» BlackRock chief investment officer Bob Doll predicted the U.S. Federal Reserve would begin cutting interest rates at around midyear 2007 to ease inflation pressure in the face of a slowing housing market. His outlook proved spot-on: The Fed began lowering interest rates in Aug. 2007 and continued slashing them nearly uninterrupted for the next year and a half.

That forecast was part of Doll’s annual "ten predictions" for the year ahead, which the firm has been publishing since 2001. Among this year’s predictions: Slow U.S. growth, but a double-digit return for domestic equities. Doll is also optimistic that the European debt crisis will ease even as the continent slips into a recession.

BlackRock did not respond to a request for comment.

See also:
Decoding BlackRock’s box (the October 2011 AR cover story)

»» New York firm Phoenix Investment Adviser, which managed roughly $90 million at the time, said it was aiming to hit the $200 million mark by the end of 2007.

That goal was reached, as the firm managed $275 million as of Dec. 2007. The event-driven JLP Credit Opportunity Fund was an attractive investment, having produced a gain of 20.32% in 2006. It then produced a 0.06% gain in 2007 and suffered a loss of 42.33% in 2008 but more than recovered with a rise of 158.63% in 2009 followed by another banner year in 2010, gaining 36%. The fund dropped 17.56% in 2011, compared with a 5.21% fall for the AR Event Driven Index. It now manages $304 million.

Phoenix did not respond to a request for comment.

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