Investment manager

AQR Co-CTO Details $ 137 Billion Investment Manager’s Push Cloud

  • Quantitative investment manager AQR has $ 137 billion in assets under management.
  • The company is in the midst of a multi-year migration to the public cloud.
  • Steve Mock, co-CTO of AQR, detailed the move which will lead to savings of 30% in some cases.

Moving workloads and data to the public cloud is a big technology lift for any business. But for the $ 137 billion AQR quantitative investment manager, it was welcome.

Quantitative research is the bread and butter of AQR, an investment manager who typically takes a long-term view of his portfolio. As with other quantitative funds, this means that access to readily available financial and economic data – and much of it – is paramount.

And while public cloud transitions come at an upfront cost, more and more financial companies are taking advantage of the value they see in the cloud versus on-premises data storage.

But for AQR, moving to the cloud was approached the same way it manages investment: meticulous planning and research.

The company consolidated sets of rules to govern how the engineering organization would move from physical data centers to the cloud, ironing out concerns about security and data ownership.

“The first two years were spent learning and discovering, and making sure we created a safe and secure infrastructure to move our business to,” Steve Mock, co-CTO at AQR told Insider.

“We didn’t write any code in the first year. It was about making sure we understood the risks we were taking and that our businesses understood those same risks,” he added.

It was the start of a multi-year journey that will help the company save costs in technology spending, hire more engineers and undertake larger research projects, Mock said.

Do not try to “lift and change”

AQR relied on two public cloud providers – Amazon Web Services and Microsoft Azure – to move nearly a third of its production workloads to the cloud, along with a number of tools.

The company primarily uses AWS for the bulk of its infrastructure work, while Azure is used in more specific workloads internally.

AQR expects 60% of its compute volume to be in the public cloud by the middle of 2022, Mock said. Ultimately, it aims to reduce its on-site workloads to just 10% to 15% of its tech stack, although Mock declined to specify a timeline.

Even in the midst of such acceleration, AQR is moving away from a so-called “lift and shift” approach whereby companies move their on-premises applications and associated data to the public cloud with minimal or no redesign.

Instead, it’s about shifting workloads in a more orderly fashion.

“We don’t want to just take our servers out of the data centers and move everything to the cloud. We’re taking a two-pronged approach, which really revolves around native adoption of cloud services,” Mock said.

The shift to working in the cloud has also resulted in a shift in AQR’s engineering workforce.

When the company started working on public cloud projects, it formed a specific cloud engineering team. Today, almost all engineers have received training or education to work with cloud technologies, Mock said.

Some 5% of the entire engineering organization are cloud engineers, a number that is expected to eventually double as AQR’s cloud footprint grows, he added.

Cost savings

As a quantitative investment manager, AQR’s business depends on vast amounts of data that needs to be linked to the company’s research teams and which ultimately helps inform investment decisions.

The company’s financial data repository system, which stores, manages, and analyzes data, has become too expensive to run on-premises, Mock said, prompting AQR to create a new one on AWS.

Moving the financial data repository to the cloud, where AQR does not have to spend human capital to manage data storage, saved the company 20% in costs. The project is expected to be completed sometime in 2022.

But the total cost savings – including not installing new servers or connecting to the fastest network to handle the interaction between databases and factoring in server depreciation costs – will reach over 30% once the transfer is complete, Mock said. .

The elasticity of the public cloud has allowed AQR to undertake large research initiatives that would not have been possible on-premises. On a recent day, the company saw a 30-fold increase in the amount of data requested from AQR’s data repository as a new research initiative got underway.

“It’s not something we could have done until we had that kind of ability,” Mock said.

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