(Bloomberg) Most everyone knows that this month marks the 10th anniversary of the start of the biggest financial crisis since the Great Depression. There was another significant event back then that gets overlooked but was still very significant. I’m referring to the quant equity crash of August 2007. It was dull by comparison to what else was going on at the time. It lasted three days, and markets snapped back on Day Four. Although many funds lost as much money in three days as they were supposed to lose in a bad year, there were no immediate blow-ups. Ultimately, though, about a quarter of quant equity funds quietly closed a year or more later, including the Goldman Sachs Global Alpha fund, as almost two-thirds of assets invested were withdrawn over the subsequent 18 months.
How the Next Quant Fund Crisis Will Unfold
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