"End of 'silence'? Ubiquant Quantitative returns to center stage"

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In early 2025, DeepSeek swept the globe with its technological breakthroughs.

The outside world is concerned about DeepSeek’s capabilities and curious about how it operates.

Especially now that financing has become the mainstream path for emerging tech industries, DeepSeek’s persistent “no financing” stance has made outsiders even more surprised at the financial strength of its management team.

But if you look back, you’ll discover that Liang Wenfeng did not start empty-handed. Behind him is a “cash flow generating machine” that has been honed for years.

This part has been extremely low-key for a long time but was noticed again this year, changing the way people understand DeepSeek.

Phantom Fund’s “Return”

Recently, Phantom Quant has been discussed multiple times in the industry.

As the quantitative private equity firm founded early on by Liang Wenfeng, the key figure behind DeepSeek, Phantom Quant had a glorious history, but once suddenly went “silent,” quietly leaving the center stage of private equity.

The most direct main factor behind these ups and downs is still strategy performance.

According to data from Simuwang, Phantom’s equity long strategies maintained returns of around 50% in the first eleven months of 2025, while the CSI 1000 and CSI 500 indices were just above 20% in the same period. Phantom’s excess return reached 30 percentage points.

This is the most outstanding period in recent years for Phantom’s externally raised products. Such relatively steady performance is reminiscent of Phantom’s heyday.

In those years, Phantom led as one of the “Four Kings of Quant,” first breaking the 100 billion AUM mark, but soon suffered declines in both performance and scale.

Until 2025, when performance made a strong comeback.

The Cause: Classic Factors Reawaken

There are two background reasons for Phantom’s performance comeback.

First, the CSI 1000 and CSI 500 index enhancement, which the market is watching, are exactly the most crowded and largest markets for quantitative private equity firms.

The surge in Phantom’s returns in these two areas means its strategies are making a comeback. Considering Phantom’s historical patterns, this is likely due to classic factors, once weighed down by scale, being revived after cycles and technological iterations.

Second, this wave of index enhancement performance is appearing across multiple quant long products. Third-party platforms show that current first-tier quant managers like MingHong, YangFu, LingJun, and Quand have similar performance levels, all neck and neck.

Third, by vertical comparison, this is Phantom's year with the most excess returns in several years. In 2024, although Phantom’s similar strategies outperformed the indices, overall returns were only in the single to low double digits, far below the amplitude seen this year.

Looking back at 2022 and 2023, Phantom’s CSI 500, for example, had annual returns of just -4.00% and 3.19%, which were not competitive within the quant asset management circle.

Three Years of “Downsizing,” the Landscape Has Changed

Since 2023, news of Phantom reducing its scale began circulating in the industry, with speculation that its AUM may have dropped to around 20 billion yuan.

But the “scale” here mainly refers to externally managed funds, i.e., the size of its asset management business.

Asset management scale means the balance of assets managed by Phantom for external institutions and individual investors, not the full investment reach of a quant firm.

As Phantom’s “slimming down” spread, market focus on this first-generation quant firm declined, and attention shifted towards leading managers with AUM over 50 billion yuan. These institutions became the main recipients of fundraising in the past three years and garnered more market attention.

In recent years, Quand Investment, Blackwing Asset, Chengqi Asset, and Century Frontier Asset have become fundraising hotspots.

Meanwhile, JuKun Investment, MingHong Investment, YangFu Investment, and other leading firms have maintained steady performance, further strengthening market attention on top-tier quant managers.

Unignorable “Mysterious Base”

During Phantom’s three years of “silence,” a low-profile internal base position has continuously supported its business.

Looking back at Phantom’s early development reveals a key clue.

Its official website states:

“From 2008 to 2014, the founding team mainly explored fully automated trading... In 2019, the company’s private equity scale exceeded 10 billion yuan.”

This “proprietary first, asset management later” sequence matches the general model of China’s first-generation quant institutions. The proprietary book’s performance curve is typically the key foundation for entering channels and launching external products.

Diving Research found: “Proprietary book” is an industry norm in quant circles but rarely disclosed publicly.

Proprietary means quant research teams use their own capital for strategy trading, with shorter decision chains and no need to consider external investors’ subscription and redemption rhythms.

Industry insiders revealed: Proprietary trading best reflects a quant company’s model capability, and is often the core force for sustaining internal returns and balancing resource allocation.

How Much Has the “Private Fund” Earned

Without public evidence, we cannot directly know the exact returns of Phantom’s internal proprietary trading.

But by industry convention, the performance of external products usually gives some reference for estimating proprietary performance.

For readers unfamiliar with quant: If a model works steadily with real external capital, its proprietary performance shouldn’t differ much.

This year, Phantom’s asset management products returned about 50%. Performance was stable, mainly quant long and index enhancement strategies, with high replicability.

Therefore, although we cannot deduce exact proprietary results, the open yield curve suggests the book likely aligns with the asset management end, possibly even exceeding it. Such correlations are typical of quant hedge fund operations worldwide.

The return of Phantom’s performance may not only mean another reshuffling of the private equity industry, but also signal that the inflection point for increased investment in China’s large model business is near.

Risk Disclosure and DisclaimerThe market has risks; investment should be prudent. This article does not constitute personal investment advice, nor does it consider individual users’ unique investment objectives, financial situation, or needs. Users should evaluate whether any opinions or conclusions herein suit their particular circumstances. If you invest based on this, responsibility is your own. ```