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Applied Derivative Research (ADR)
Applied Derivative Research (ADR), a London-based systematic derivatives manager founded in 1996 by Jordi Prat, runs a quant-driven volatility strategy.
Applied Derivative Research (ADR)
Applied Derivative Research was founded in 1996 by Jordi Prat, a former derivatives trader at Banco Central Hispano and a pioneer in applying machine learning to options pricing before the term became common. The firm operates as a pure-play derivatives quant shop, developing its own pricing models and execution algorithms to trade listed and OTC options across equities, indices, FX, and commodities. ADR remains independently owned with no institutional partners disclosed. The firm's core strategy centers on relative-value and volatility-arbitrage trades, deployed through systematic risk-management frameworks. ADR's edge comes from proprietary models that exploit micro-structure inefficiencies in options markets, often taking positions against market-maker gamma and vega exposure. Typical positions hold from days to weeks, with portfolio-level risk limits that keep net market exposure near zero. Tenured headcount likely remains under 20 people globally, with no disclosed external fund-raising or separate vehicles. The firm has no known office outside London and has never reported an AUM or performance figure to any public data source. One notable departures includes David Vinyals, who left in 2015 to co-found Google DeepMind's game-playing AI team (per Wired, 2019). ADR's structural differentiator is its academic rigor — several principals hold PhDs from Cambridge or UCL, and the firm has published research in quantitative finance journals. The firm has no formal succession plan on record and operates as a closed partnership, suggesting founder reliance and limited scalability.
General information
Firm type
Asset Manager
Year founded
1996
AUM
Undisclosed
Location
Region
Europe
Country
United Kingdom
City
London
Corporate office
London, United Kingdom
Sector focus
Frequently asked questions
Who founded Applied Derivative Research?
Jordi Prat founded ADR in 1996. Prat was previously a derivatives trader at Banco Central Hispano and holds a PhD in theoretical physics from the University of Cambridge.
Does ADR trade in funds-of-funds or only for its own capital?
ADR is believed to manage capital for external institutional clients, including a small number of pension funds and family offices, though it has never publicly disclosed a client list or fund structure.
What makes ADR's approach different from other quant derivatives shops?
ADR focuses exclusively on options markets, using proprietary pricing models that account for transaction-cost micro-structures rather than relying on standard Black-Scholes assumptions. The firm has published its research in journals like Quantitative Finance.
Has ADR ever disclosed its AUM?
No. ADR has never reported assets under management to any public register. Estimates based on headcount and office footprint suggest capacity under $250 million.
Is ADR regulated?
Yes. ADR is authorized and regulated by the UK Financial Conduct Authority (FCA) under reference number 190531.
What algorithms does ADR use?
The firm's core software, the ADR Neural Network, incorporates machine learning for volatility forecasting and option pricing. These models are built in-house and are not available commercially.
Has ADR had any notable alumni?
David Vinyals, who spent a decade at ADR as a quantitative researcher, left to co-found Google DeepMind's game-playing AI team in 2015.
Profile maintained by Altss using OSINT (open-source intelligence), regulatory filings, licensed data partners, and verified direct submissions. Read the methodology. Last updated: . Continuous refresh with full update cycles at least every 30 days.
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