Neo Ivy Capital’s Renee Yao: The Woman Who Quants

By Michelle Wong

From graduating with a MA in statistics, managing money for buyside firms, to starting a hedge fund – this is a path rarely shows up in any young girls’ dreams, and studies have shown that this is also not a preferred career among female professionals.

According to a research conducted by the US Institute of Education Sciences, there is a massive difference in the proportion of males and females studying STEM subjects. Out of all the students with awarded bachelor’s degrees in STEM fields, females only take up 36 per cent of them. This suggests that quantitative investment firms are dealing with a smaller pool of female candidates to begin with, which further contributes to the gender disparity problem on the buyside.

A study by Harvard Business School and the Bella Research Group has found that females manage less than 1 per cent of funds in the US asset management industry. (Photo: unsplash.com)

However, even after women enter the buyside space, it is not still not a walk in the park. As mentioned by Renee Yao, founder and portfolio manager of Neo Ivy Capital, being a quant portfolio manager is both physically and emotionally demanding, and this might even be worsened by the negative stereotypes towards women. 

Despite the challenges, Yao started her own firm that opens up a “third” generation of quants – one that invests in liquid, publicly traded equity securities, and utilises artificial intelligence to automatically generate ideas in a more efficient way.

L: Lynk | R: Renee Yao

L: You started your career as a researcher and later made the switch to portfolio management. What made you decide to go into quantitative finance given it’s not the most popular subject for female university students? 

R: I was studying applied math and statistics at Columbia. When one day a recruiter called me and asked if I’m interested in talking to one of the top hedge funds in the quant space, I said yes and that was the beginning of my career on Wall Street. 

L: Back in 2015, what made you decide to start your own firm?

In 2015, Renee Yao founded Neo Ivy Capital after running portfolios in two buyside firms. She was also recognised as one of the Tomorrow’s Titans 2019 by the Hedge Fund Journal. (Photo: Courtesy of Renee Yao)

R: After running portfolios at two different companies, I felt that the traditional quant approach, which is trying to exhaust human power to come up with new predictions, had already become a very sanctioned space. I also felt that artificial intelligence, which was new and not known by most people at the time, should really be the future of quant investing.

However, the idea of how those predictions were generated and how the infrastructures should be built was really different from the traditional quant business model. Therefore, I decided to start my own firm and build everything from scratch.

L: Have you always expected yourself to be working on the buyside?

R: I didn’t know much about the differences between the buyside and sellside when I was at school. But once I decided to become a portfolio manager, my path kept me on the buyside. I guess the challenge for new graduates is how to get to know themselves better in order to plot a future path for themselves. Understanding ourselves is the first step towards figuring out which type of role we want to be in for the long term.

L: Why do you think there are not as many women opting for a career on the buyside?

R: Being a buyside portfolio manager, especially quant manager, requires lots of skills and encounters lots of challenges, both physically and emotionally. First of all, you need to master the hard skills which include technical ability to build a fully automatic quant model. Secondly, you need to overcome the stereotype that women are less competitive than men in the quant space. There are less female students in science majors such as math, physics, or computer science, so we are dealing with a smaller pool to begin with.

L: As you mentioned, being a buyside portfolio manager is quite demanding. What is in it that attracted you to work in the space?

R: I’ve always liked to challenge myself. It is through those difficult tasks one gets to improve herself. As Margaret Thatcher said, “look at a day when you are supremely satisfied at the end. It’s not a day when you lounge around doing nothing; it’s a day you’ve had everything to do and you’ve done it”.

L: If you were to persuade more young women to join the buyside space, how would you advise them?

R: Try to go for the science field, don’t get discouraged by the stereotype that women cannot study science. There are lots of successful female mathematicians and physicists out there.

L: If buyside firms were to employ more women, how do you think that might impact the cultures and decision-making processes of the firms?

R: I think it will definitely help balance the workplace environment. Most of my female colleagues have been both smart and easy to work with.

L: If you ever have the power to change the buyside, what is the one thing that you would like to change?

R: Start hiring more female candidates. We should really encourage female students to major in science subjects. And when it comes to careers in quantitative finance, we should provide more opportunities to women so they will have a change to demonstrate their abilities and skills.

Buyside Power Women is Lynk’s latest interview series that features conversations with female leaders and male allies on the buyside to increase visibility of women in the industry. The series covers the career journeys of female CIOs in different regions, and how advocacy for diversity could influence future capital allocation.

Stay tuned for upcoming Buyside Power Women editorial articles and live events here.