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The secret of the world's biggest listed hedge fund

Wall Street vs. machines

With $72 billion in assets, Man Group is the world's biggest listed hedge fund. The London-based firm took in $1.2 billion in new money in the past quarter. So what's its secret?

It lets machines do a lot of the work.

In fact, Man Group President Luke Ellis said computer-based models that pick investments have been outperforming people this year.

That's because people were expecting the environment to change this year, but it hasn't, he said.

"The backdrop is more of the same and computers are much better up at putting up with more of the same. Humans always want to call a change in the markets," he told CNBC's "Power Lunch " on Wednesday.

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Ellis anticipates that should continue all of next year, "as long as we don't see the very high correlation to the risk-on risk-off."

He also has his eye on the oil market, and the distressed debt that has been taken on by energy companies.

With oil prices dropping into the $70s, that could be a big problem for some of the smaller players—mainly those involved in the shale gas revolution, Ellis said.

"Down here at $70, they've got fixed cash flows that they've got to pay out and essentially the only way of meeting those cash flows is try to pump more oil. They pump more oil that pushes the price down further. So I think you are going to see a number of people squeezed out."

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