High-Frequency Trading (HFT) has changed Wall Street as traders continue to execute trades at incredible speeds. The HFT market has also grown to dominate the overall financial trading industry and with it, investors have managed to make massive leaps in profits culminating to the domination of the hedge fund managers’ portfolios.

According to research, the world’s top earning portfolio managers are predominantly quant traders and last year, the list of the top eight was dominated by quants.

Institutional Investor published a reported that showed the top 25 hedge fund managers took home $13 billion last year with Ken Griffin, the founder and chief executive of Citadel, and James Simons founder and chairman of Renaissance Technologies, sharing the top honors after taking home $1.7 billion each.

The amount earned by Griffin alone was enough to pay more than 100,000 US federal minimum wage ($15, 080) earners or nearly 63 best-paid bankers judging by Jamie Dimon’s (JPMorgan Chase CEO) $27 million salary package, according to The Guardian.

There have been a lot of complaints directed towards Wall Street hedge fund managers regarding their huge paychecks compared to the level of returns to investors. Not many hedge fund management firms can justify the type of money paid to their portfolio managers as they continue to blame market volatility on declining returns to their clients.

However, some quant-focused hedge fund managers can actually take credit for the kind of money they make. One of the best performing quant-focused asset management firms over the last three years has been Leman Capital Management, which is an Algo-trading investment company based in the UK.

According to the firm’s results from last year, as quoted by several reports, Leman Capital Management outpaced 99% of quant-focused hedge funds for the last three years in a row, including 2015, in which it delivered a return of well over 60%.

Leman Capital’s performance in the current calendar year remains well on course to beat its own achievements of last year after managing an average monthly return of 5.8% compared to last year’s 5.2%. As of June 30, 2016, Leman Capital had YTD return of 34% and nearly $90 million worth of assets under management.

This suggests that ideally, Leman Capital Management will be making roughly $30 million from an investment of $90 million in six months’ time if the portfolio managers can maintain their current win rates.

By the end of the year, if a portfolio manager from this company takes home $10 million it would be improper to categorize them with those Wall Street portfolio managers that have lost money in the market leading to the closure of several hedge funds.

Interestingly, most of the hedge fund managers that have complained about the market are not heavily engaged in High-Frequency Trading and have actually blamed the system for their exposure. But does this warrant them to continue pocketing huge checks when their firms are bleeding cash? That has been the question for the last few years and it seems to have been completely ignored.

High-Frequency Trading allows traders to execute multiple trades in a matter of microseconds and this creates room for traders to capitalize on the short-term market volatility. With just a single cent worth of change in the stock price, HFT traders can make money by purchasing thousands of shares across hundreds of stocks, which mean that in seconds they could make thousands of dollars.

While speaking at the SkyBridge Alternative Conference in May, billionaire investment guru Leon Cooperman said that the “hedge fund model is under challenge…it’s under assault,” pointing to recent events that have prompted some of his investors to ask for their money to be returned.

With traditional trading, it is hard to get a single trade let alone hundreds, over the line in a matter of seconds.

Conclusion

In summary, High-Frequency Trading has made a major impact in the stock market and now, most hedge funds find themselves in a vicious cycle of declining cash flows as investors continue to pull out their money.

Some firms have had to close shop while others have chosen to embrace High-Frequency Trading, which as The Telegraph reports, allows them to leverage brain power with computing technologies for optimum results.