We all feel like kicking computers sometimes. Investors in some “quant” funds must be putting on their steel toe-caps right now. Quant (short for quantitative) funds generally use complex computer models to place their bets. While usually prized for their diversified, “market neutral” approach, some high-profile funds have recently suffered steep losses. Quant bets on equities going awry is a big reason why Goldman Sachs’ multi-strategy Global Alpha fund, for example, is down 27 per cent this year, with more than half of that occurring last week.

So what has gone wrong? Contagion from the subprime crisis is the likely answer. Some multi-strategy funds, suffering losses in fixed-income, have probably felt compelled to reduce their overall risk. Offloading illiquid credit portfolios at a steep discount is not very appealing (or even possible). Assets such as large-cap equities are far easier to sell. Matthew Rothman, chief quantitative equity strategist at Lehman Brothers, estimates funds under management utilising quant strategies could be up to $1,500bn.