In mid-June, four heavy hitters from China's quant hedge fund scene sat down for a panel discussion on the industry's evolving landscape.
The lineup: Ma Zhiyu from Lingjun Investment, Li Xiang from Mengxi Investment, Zou Yitian from Black Wing Asset Management, and Wang Hengpeng from JoinQuant.
All four firms sit comfortably at the top tier, and the principals bring serious credentials—Ma is a Stanford alum who cut his teeth at Millennium's WorldQuant; Zou also went through Stanford, spending over a decade at Barclays and Bosera; Li holds a Master's from Brown and is among the earliest quant traders in the domestic market; Wang runs the show at JoinQuant as general manager.
If there was one takeaway from the entire conversation, it's this: AI is no longer an option—it's the only strategic direction that carries any weight.
AI Is Redrawing the Map of Investment Research
Zou Yitian made a point that stuck. He sees AI as a force multiplier for researchers—boosting individual output by an order of magnitude or more. But it doesn't replace human instinct and judgment. Put simply: AI crunches the numbers; humans make the calls.
What's equally interesting is a trend several panelists picked up on. The line between quantitative and fundamental investing is getting blurry, thanks to AI. In the old days, quants ran models and fundamental guys did field research—the lanes were clearly marked. Now AI is breaking down those walls. Quant shops are starting to pay attention to fundamental narratives, while fundamental firms are tapping AI for data mining. Looking ahead, multi-asset, multi-strategy, and global exposure might well be where the top players all converge.
Alpha Is Getting Tougher—But the Big Guys Are Still Getting It
Ma Zhiyu kept it real on excess returns. The post-"9·24" rally in late 2024 brought a nice tailwind, with liquidity and small-cap names delivering a solid run. But fast-forward to 2026, and the market has gotten far more polarized. Excess returns are regressing to the mean, plain and simple. Zou put it even more bluntly—the days of easy pickings from the gap between daily turnover and total quant AUM are over. The bar has been raised, and it's a lot higher now.
That said, Li Xiang added an important nuance. The industry can still churn out positive excess returns, but the trick is relentless iteration. The low-hanging fruit—the surface-level mispricings—are drying up fast. Quant firms are iterating like LLMs in a hyper-competitive environment, constantly refining their edge. Those that keep iterating stick around; those that don't, fall off the map.
JoinQuant: AI Factors Now Make Up Over 70%
JoinQuant is a good case study here. According to third-party data, the firm runs about 10 billion yuan in AUM, with a headcount of 70 to 80 people—over half of them in research and IT. On the factor side, price-volume factors dominate, accounting for roughly 70% to 80%, with fundamental and alternative factors filling out the rest. The approach to factor mining has evolved from a mostly manual process in the early days to a hybrid of human input and machine learning, and more recently the firm has been doubling down on end-to-end models and neural networks.
The "over 70% AI-driven factors" figure can mean different things in different contexts—sometimes it's about the proportion of AI-mined factors in the total library, other times it's about the share of excess returns attributable to AI models. But either way, the underlying reality is unmistakable: at top-tier quant firms, AI has moved from a supporting tool to the core engine of the research operation.
Three to Five Years Out: Consolidation and a Serious Shakeout
Li Xiang offered a sobering view on what lies ahead. Over the next three to five years, the industry structure will harden. Getting alpha will become significantly harder. The biggest risk, in his view, isn't market turbulence—it's complacency and a failure to invest ahead of the curve.
Wang Hengpeng, for his part, had a simple reminder for investors: black swans will come back for a second round. Respect the market, keep iterating, and stay at the table—that's the only way to survive over the long haul.
The quant industry is going through a deep, AI-driven reshuffle. Alpha hasn't vanished—it's just getting a lot more expensive. And only the firms that have truly baked AI into the core of their research will be able to foot the bill.
Source: Quant industry panel discussion, June 2026
Welcome to our Blog!
If you are interested in career opportunities, please send your CV to: recruiter@alphamaker.link
If you would like to share your story, please contact us on WeChat: AMQuantcareer