CEO, QS Investors
For her contributions to quantitative investment and for her leadership in the financial industry. Campagna is the founder of QS Investors, a leading customized solutions and global quantitative equities provider. She is responsible for all business, strategic, and investment decisions within the investment-management firm.
When Janet Campagna arrived at Caltech in 1983, she had already taken the unexpected path. First, she had come to study social science in a department that was still a young, small island within a campus devoted to science. She was also the only woman in her class.
Thirty years later, Campagna is still charting new territory. As the founder and CEO of QS Investors, she is among a very small group of women who lead investment firms.
She is also the first social scientist from Caltech’s Division of the Humanities and Social Sciences to receive the Distinguished Alumni Award.
Before Caltech, though, Campagna could not have predicted a career in finance. She had dipped her toe into a number of subjects, auditing various classes at different universities around the Boston area, where she grew up. She gravitated toward science and math but also toward history, art, and architecture.
When Campagna took her first economics class at Northeastern University, she discovered a subject that combined her interests. “It appealed to my analytical mind,” she says. “There are physical laws of the universe. But there are no laws of the human mind and behavior, which is what makes the actual world and society operate.” Economics, she realized, offered a way to understand human behavior through a scientific lens.
After earning her undergraduate degree, Campagna decided to head west to join the nascent social-science program at Caltech.
"The graduate program at the time was tiny and very intense, with a great deal of emphasis on economic theory," says Jean-Laurent Rosenthal, chair of Caltech's Division of the Humanities and Social Sciences. "There were also not a lot of women, as was true of the campus overall."
“It’s true that I was the only woman in my year, in my study group, in my office,” Campagna says. “But I found a wonderful and intellectually challenging community at Caltech. It was an adventure. ”
For a time, Campagna thought she might be headed for government. After Caltech, she continued to the University of California, Irvine, where she researched electoral bias and worked for the state of California to help with its redistricting plans. But she soon decided neither academia nor politics were the right fit.
Then came an offer for her first job in finance. “I knew nothing about finance, really,” Campagna laughs. “But I just jumped at it. I went to the library and grabbed all the books I could. Then I began to realize that there were corollaries to everything I knew as a social scientist. It made sense to me.”
Campagna started at a time when the investment world was becoming increasingly complex, and a new field was emerging—quantitative finance. Traditionally, investors would determine prices by evaluating a company’s individual performance. But more and more, investment firms were turning to new methods involving complex mathematical formulas crunched on advanced computers. People able to blend the math, financial theory, and computer programming were in high demand.
“In some ways, I got in on the ground floor,” Campagna says. Once again, she found herself a woman in a deeply male-dominated field, but she thrived. “There were a number of brilliant people brought from academia to develop these offices. There was a robust culture of learning—it was in the atmosphere.”
As the field of quantitative finance grew, so too did Campagna’s career in asset management. She moved steadily up the ranks of several firms, including Barclays Global Investors in San Francisco and Deutsche Bank in New York, where she eventually became the global head of quantitative strategies. In the early 2000s, the reputation and influence of quantitative analysts, who became known as “quants,” had reached a peak…but the financial crisis was soon enough to follow.
“The first signs of the economic downturn had actually started in the summer of 2007, with what we call the quant crisis,” Campagna says. “That’s when a number of quantitative hedge funds suffered huge losses.” Panic set in, and other parts of the economy soon fell.
The term “quant” took on a different meaning. “Suddenly it went from ‘the geeks shall inherit the earth’ to ‘everyone is terrible,’” Campagna acknowledges. “There was a lot of hubris that led to risk-taking. But the point of our work is meant to protect against risk. I’m proud because our strategies actually managed to greatly contain our losses for a number of our clients during that time,” Campagna says. The industry, however, was shaken. Thousands of employees lost their jobs and a number of companies, including Deutsche Bank, began to rethink their strategies.
In 2009, Campagna decided to make another leap and proposed that Deutsche allow her to spin off her department into her own company.
The following year, QS Investors was formed.
As the company’s CEO, Campagna had broken another barrier. According to a report published by Morningstar Research in 2015, less than 10 percent of all fund managers are women, and less than 2 percent of firms in the fund industry have women as sole CEOs.
Campagna prefers to keep the focus on the quality of her firm’s work, about which she is utilitarian. “Asset management is different from other types of investment. We manage other people’s money, not our own. Our job is to be fiduciaries and protect their investments. These are people’s health-care and retirement funds. It’s a responsibility that I take very seriously.” In 2014, QS Investors was bought by Legg Mason, but it maintains its independent management.
Bob Boyda, a senior managing director at Manulife Asset Management and a client of Campagna’s, says that Campagna helped his company succeed in an intensely competitive business. “She took complex problems and presented a solution with a balance of elegance and simplicity—easily 10 years ahead of its time,” he says.
Campagna credits Caltech for instilling a scientifically rigorous approach to her field and for a community of contacts that she maintains today. The chief investment officer at her company, Rosemary Macedo (BS ’87), and Campagna’s husband, Yasser A. Abdelrazek (MS ’85), are both alumni.
Campagna serves on the Information Science and Technology council for Caltech's Division of Engineering and Applied Sciences. "Janet is a visionary business leader," says Ares Rosakis, the Theodore von Karman Professor of Aeronautics and Mechanical Engineering at Caltech, who is also a longtime friend. "She has enriched EAS through her wise counsel, her loyalty, and support."
As the department of Humanities and Social Sciences celebrates its 50th anniversary at Caltech this year, Rosenthal admits to being proud to celebrate the first social scientist Distinguished Alumna. "Janet has been a pioneer and an example to all who want to enter fields that seem closed, from graduate studies at Caltech as a women in the very early 1980s to leading a financial firm today. It's not just breaking into the boys club, it is performing her work extraordinarily well," he says.
Today, Campagna still views her job as a balance of business, hard science, and something more elusive. “Ultimately, we are still trying to understand human behavior and what drives it,” she says. “In the process, we work to protect resources that people need. I think it’s a fascinating, worthy, and important business.”
by Marcus Woo, Ben Tomlin
photo credit: Scott Council