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29 How the largest investor in Hedge Funds got Started with Aref Karim of Quality Capital Management – 1of2

“Simplicity and robustness, some of the basic things that were fundamental to our philosophy at QCM because I believed in them, still prevail today.” – Aref Karim (Tweet)

How do you transition from working alongside the capital management industry to starting your own hedge fund? Our next guest grew up in Bangladesh but fled to London during the Bangladesh Liberation War in 1971. He worked as an accountant and then went on to join the Abu Dhabi Investment Authority (ADIA) where he pioneered the organization’s futures investment department. Learn about his personal setbacks and successes, his innovative investment strategies, and how he founded Quality Capital Management in the UK.

Thanks for listening and please welcome our guest, Aref Karim.

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In This Episode, You’ll Learn:

  • About Aref’s childhood in Bangladesh.
  • How his father wanted all 10 of his children to attend university and instilled in them the belief system that made them successful.
  • Why Aref decided to study English and Literature even though his background was in the sciences.

    “My father quite fancied me to be joining the foreign service – he thought I could make a good foreign minister or ambassador for the country.” – Aref Karim (Tweet)

  • The story of Aref’s escape to the United Kingdom because of war and social upheaval in Bangladesh.
  • How he went from being an accountant in England to working for the largest sovereign wealth fund in the world, ADIA.
  • Aref’s perspective on the history of the hedge fund industry and the alternative investment industry.

    “The degree of sophistication increased many fold because of technology, the power of computers, the power of being able to go into tighter and shorter time frames.” – Aref Karim (Tweet)

  • About the beginnings of ADIA’s futures department that Aref helped to start.
  • The early days of the futures industry and Aref’s perspective on trend-following.

    “I don’t believe in too many moving parts, because I feel like it’s a lot of smoke without the fire.” – Aref Karim (Tweet)

  • How he overcame personal setbacks when his wife unexpectedly passed away, leaving him with three young children.
  • About Aref’s return to the UK and his decision to start his own CTA and start trading in futures.

    “The more variables you introduce – the more that things can go wrong or go out of sync.” – Aref Karim (Tweet)

  • About the genesis of Quality Capital Management.
  • How Aref’s investment strategy evolved and the specifics of his current trading strategy.

    “Our propensity to buy is far greater than our propensity to sell, and this always keeps that element of buoyancy on the long side.” – Aref Karim (Tweet)

  • How he measures the “Flow” of the market.
  • Why his strategy looks at changes in volatility and doesn’t care whether it is a bond or an equity.
  • How QCM went from using a few indicators to no indicators at all.

Resources & Links Mentioned in this Episode:

This episode was sponsored by Swiss Financial Services:

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“Our basic premise is that all these assets are one and the same so we use the same approach whether it is commodities, fixed income, or equities.” – Aref Karim (Tweet)