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I admire Buffett the most but he wouldn’t approve of what we do: Winton’s Harding

Warren Buffett
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Warren Buffett

Warren Buffett is one of the investors he admires the most but David Harding says the investing giant would not approve of what his $30 billion hedge fund Winton Group does.

"The three investors I admire the most and rather simplistically the three most successful ones - Warren Buffett, George Soros and James Simons," Harding told CNBC at the opening of the Winton Gallery at London's Science Museum.

"James Simons is the greatest mathematical scientific investor in the world…The sage of Omaha is obviously the wisest philosopher and demonstrates the link between success, wealth, philosophy and wisdom," the founder of Winton claimed when pressed on the reasons behind his selection.

"George Soros is a great political economist and statesman and deep thinker about the state of the world so I respect all three of them very much," he offered.

Harding is well-known as a generous philanthropist and indeed the new Zaha Hadid-designed gallery bears the name of his hedge fund on account of a £5 million ($6.3 million) donation from himself and his wife.

With his 30 years of investment management experience,Harding is also renowned for taking a quantitative approach to investing due to his heavy reliance on scientific research to form trading decisions.

This reputation contrasts sharply with billionaire investor Warren Buffett's role as one of the world's most famous value investors.

"Warren Buffett says in the long run the stock market is a weighing machine and in the short term it is a voting mechanism. He exploits the weighing machine and we exploit the voting mechanism," Harding said, explaining the differences in methodology.

Algorithm on screen, computer, technology
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However, Harding notes there are also elements of his firm's work that would resonate with the so-called Sage of Omaha.

"Warren Buffett wouldn't approve I don't think of what we do but his point about passive is you want low transaction costs. Low transaction costs are a very key focus of what we do. We are aiming to get transaction costs down to a very low level."

While Harding acknowledged that the hedge fund industry is facing mounting pressure over fees and that within Winton they have selectively reduced the fees on some products "at the margins", he also defended those charged by his fund.

"The highest element of the transaction cost is our fees which are not excessive by hedge fund standards but are premium fees for what we think is a good quality service in limited supply," Harding said.

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