First Quadrant

Our Philosophy

First Quadrant (FQ) believes its edge is derived from a focus on macro phenomena, the drivers of return and careful examination of risk. FQ seeks to gain an investment edge by applying a systematic approach to the kind of fundamental and economic insights sought out by fundamental investors.

FQ adheres to three key investment principles:

• Build Breadth: By applying a systematic approach to the kind of fundamental and economic insights sought out by fundamental investors, FQ strives to develop new insights more quickly, better manage the risk of the Funds and enhance returns
• Innovate Relentlessly: Innovation rarely occurs without some friction, irritant or need. By causing serious minds from diverse backgrounds in finance, science and mathematics to work together, FQ cultivates a cognitive friction that leads to uncommon insights
• Respond Tactically: Identify all types of drivers of return, paying close attention to the fundamentals—but unlike others, also taking into account shifts in investors’ preferences in order to anticipate investor behavior

Our Approach

Focus on the forests and the trees.
First Quadrant (FQ) looks at the world first through a macro lens, and then sweats the details to make sure the best and right trees are selected to capture macro opportunities.

Look at all types of drivers of return.
Like other investors, FQ pays close attention to fundamental characteristics—both known and forecasted—but it doesn’t stop there. The firm believes asset prices don’t simply move based on fundamentals, but also based on shifts in investor preferences for those assets. These shifts in investor preferences are precisely what technical models intend to capture—but without insight and after the fact. The goal is to identify underlying drivers in order to anticipate changes in investor behavior in a way that few do.

Risk management plays a key role in both offense and defense.
FQ understands that risk is what investors are being paid to bear and strives to understand and avoid those risks that are uncompensated, in exchange for those risks that provide real opportunity. First Quadrant then layers on an entirely independent view of risk—independent of FQ’s own process, data and investment team—that further challenges its thinking about risk.