Inside the WorldQuant Alpha Factory Wall Street Journal reporter Bradley Hope provides an indepth look into the unusual business model powering WorldQuant.

Few if any investment firms have a more global business model than WorldQuant, LLC, Bradley Hope reported in a recent Wall Street Journal article. WorldQuant “employs hundreds of scientists, including 125 Ph.D.s, around the world and hundreds more part-time workers to scour the noise of the economy and markets for hidden patterns,” Hope wrote. “This is the heart of the firm. [WorldQuant founder Igor] Tulchinsky calls it the ‘Alpha Factory.’”

The Alpha Factory starts with data, acquired by a special WorldQuant team that searches out “interesting and new data sets.” Researchers in far-flung foreign outposts from Bangkok and Beijing to Mumbai and Ramat Gan, Israel, build quantitative models to find trading patterns in the data, writing algorithms “that purport to predict similar patterns in the future” — what WorldQuant calls alphas — which, after testing, get added to a central library. Portfolio managers combine the alphas into strategies, which are then combined into portfolios. “It comes down to turning data into ideas into investments,” Tulchinsky told the Journal. “When we started out with very few alphas, we were concerned with secrecy, but now that we have millions, no one alpha is important. Our edge is putting things together; it’s the implementation.”