The Quiet Quant Behind Wall Street’s Tax-Saving Surge

Wealth managers use leveraged long-short, tax-aware strategies inside separately managed accounts (SMAs) to harvest losses and offset gains, deferring taxes in a rising market. Quantinno Capital Management, led by Hoon Kim after AQR, has exploded from about $2B to roughly $70B in three years, challenging AQR as Fidelity and Schwab tighten custody. The model’s growth hinges on advisor adoption, but it carries leverage costs and bear-market risk, plus concerns about over-selling to clients.