<p><img src="https://static3.businessinsider.com/image/5fb6d40250e71a00115564c8-1512/caotue management downfall 4x3.png" border="0" alt="caotue management downfall 4x3" data-mce-source="Stephen Lam/Reuters; John Lamparski/Getty Images; Kimberly White/Getty Images; SSPL/Getty Images; Alex Izdorcyzk/Twitter; Samantha Lee/Business Insider"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Last spring, Coatue Management, a $25 billion hedge-fund giant, did something unusual: It made an appearance.</p><p>The secretive, tech-focused investment manager has had a stellar track record under billionaire Philippe Laffont. But the "<a href="https://www.businessinsider.com/billionaire-julian-robertsons-tiger-network-spans-hundreds-of-funds-2019-11">tiger cub</a>" usually demurred when it came to discussing business publicly.</p><p>In May 2019, though, two Coatue execscofounder Thomas Laffont, Philippe's brother and the leader of the firm's private-investment strategies, and Alex Izydorczyk, its 26-year-old head of data sciencespoke for nearly 45 minutes at Domino Data Lab's Rev conference.</p><p>What compelled Coatue to pull back the curtain'</p><p>The firm had <a href="https://www.bloomberg.com/news/articles/2019-02-28/laffont-s-coatue-seeks-250-million-for-first-quant-hedge-fund'r=coatue-teaser" target="_blank" rel="noopener">announced in an investor letter</a> a few months earlier that it was raising several hundred million dollars to launch its first quant fund, an outgrowth of a data-science group that had been expanding under Izydorczyk. It boldly predicted that its team of 30 scientists and engineers would eventually reach 100.</p><p>After a successful trial run managing internal capital in 2018, the quant-fund group was ready to work its magic on investor cash north of $350 million.</p><p>But Coatue's quant fund wouldn't last another 15 months. By June 2020, <a href="https://www.businessinsider.com/coatue-philippe-laffont-is-returning-quant-funds-outside-capital-2020-6'r=coatue-teaser" target="_blank" rel="noopener">Coatue returned</a> what outside capital remained and laid off a substantial chunk of the team.</p><p>A short while later, the quant fund was mothballed entirely and ceased trading, sources familiar with the matter said. The remaining staffers were reassigned to support the traditional hedge fund, which has seen stellar returns in 2020.</p><p>Business Insider spoke with more than 20 sources about the rise and demise of Coatue's quant fund.</p><p>These sources described a grueling environment where leaders micromanaged, hurled insults, reamed out staffers in public, and fired people seemingly on a whim. And they said that environment and a lack of buy-in for the strategy's philosophy at the very top of Coatue hobbled the heavily hyped fund.</p><h1><a href="https://www.businessinsider.com/coatue-quant-fund-philippe-laffont-performance-data-science-2020-11'r=coatue-teaser" target="_blank" rel="noopener">SUBSCRIBE NOW TO READ THE FULL STORY:</a></h1><h1><a href="https://www.businessinsider.com/coatue-quant-fund-philippe-laffont-performance-data-science-2020-11'r=coatue-teaser" target="_blank" rel="noopener">Inside the rapid rise and fall of Coatue's quant fund: How a 22-year-old Wharton wunderkind seized power, alienated employees, and blew a $350 million opportunity</a></h1><p><strong>SEE ALSO: <a href="https://www.businessinsider.com/coatue-philippe-laffont-is-returning-quant-funds-outside-capital-2020-6'r=coatue-teaser" >Coatue is returning all outside capital in its $350 million quant fund after computer-driven trades broke down in extreme market volatility</a></strong></p><p><strong>SEE ALSO: <a href="https://www.businessinsider.com/peter-zhou-coatue-rising-star-launching-hedge-fund-2020-11'r=coatue-teaser" >A rising star from billionaire Philippe Laffont's Coatue is starting his own hedge fund and has at least $300 million lined up from investors</a></strong></p><p><strong>SEE ALSO: <a href="https://www.businessinsider.com/laffonts-alternative-data-buyer-dave-schwartz-no-longer-at-coatue-2020-9'r=coatue-teaser" >$26 billion Coatue is down one of its top alternative-data buyers after the firm's quant fund that relied heavily on the unique datasets was rocked by market volatility earlier this year</a></strong></p><p><a href="https://www.businessinsider.com/coatue-management-quant-fund-data-science-performance-phillipe-laffont-systematic-2020-12#comments">Join the conversation about this story »</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/how-symphony-seas-worlds-largest-cruise-ship-deals-with-waste-2020-3">How waste is dealt with on the world's largest cruise ship</a></p>
Click here to read full news..
