Often touted as the data-based approach to reaping alpha by exploiting human biases, quantitative investing is having somewhat of a renaissance after a tough period of underperformance.

Quant investing refers to a broad universe of algorithm-driven strategies, ranging from statistical arbitrage that profits from fleeting price differences, to factor investing, that benefits from identifying persistent marker drivers.

Working with a rigorous performance test system, Australian super funds consider quant investing a desirable middle ground between passive and active management, as the method bears a tolerable level of risks, fees and tracking errors.

US or European pension funds’ incentive to select quant managers is less to do with…