PGIM Boosts Quant Shop QMA With London-Based Acquisition

QMA is joining forces with London-based Wadhwani Asset Management as the $128.1 billion quantitative equity manager seeks to expand beyond the U.S.

The acquisition of Wadhwani Asset Management by PGIM, Prudential Financial’s $1 trillion investment management arm, is expected to close sometime in the first quarter of next year. The macro-focused quant firm will become part of QMA but will retain autonomy over its operations, with founder Sushil Wadhwani continuing as chief investment officer.

Andrew Dyson, CEO and chairman of QMA, said the deal made sense strategically as well as culturally. “We each feel that quant processes are tied to economic foundations,” he said in an interview. “Both businesses have a strong academic culture and are very much team-based,” he added.

Wadhwani echoed this comment, remarking that “a lot of large quant groups are organized as little fiefdoms,” but that QMA and WAM are both “team-oriented.”

“What is appealing with QMA is that they firmly believe that one needs a theoretical reason for having a factor or running a model in a particular way,” Wadhwani said. “It’s easy to see patterns in the data where there are none.”

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Discussions between QMA and Wadhwani started in January. As a result of the acquisition, QMA will get complementary quant products, including risk premia and macro, as well as a strengthened international presence. Wadhwani Asset Management has 35 people in London and 90 clients, the majority of them non-U.S.

PGIM, meanwhile, will provide Wadhwani with distribution, as well as operational and other business support.