The long-running stock bull market has left America’s wealthiest with a tax problem: too many investment gains with too few losses. With major indexes marching ever higher, and as founders and early employees of tech firms accumulate fortunes in concentrated stock positions, it’s become harder and harder for wealthy folks to identify losers that they can use to “harvest” losses to offset their capital gains.

A fast-growing strategy designed to fix this problem has become the toast of the investment industry, from the Wall Street hedge funds crafting the products to the independent advisors hawking them to clients. In the so-called long-short tax-aware strategy, an investor uses leverage to make hundreds, even thousands, of additional bets on stocks—some that they own, and some that they short. (Shorting is betting that a stock will fall: you borrow shares, sell them and later buy them back, preferably at a lower price). The novel formula deliberately creates plenty of losses, on either its long or short positions, which investors can harvest to strategically offset gains elsewhere, while keeping most of their money invested in the rising stock market.

Today, the assets committed to long-short tax aware strategies are fast approaching $200 billion, up from just a few billion five years ago. With an estimated $260 billion under management Greenwich-based AQR Capital Management, a 1,000-person hedge fund and asset manager, is well known as a pioneer of this trading strategy. Its success has prompted blue chip copycats from asset management giants like BlackRock, Nuveen, and Franklin Templeton to fellow quant hedge funds like Two Sigma and WorldQuant. All have recently launched or are exploring similar “long-short tax aware” offerings. However, AQR’s biggest rival is a little known New York City-based firm called Quantinno Capital Management. In fact Quantinno’s founder, a 57-year-old accounting PhD named Hoon Kim, actually helped create one of AQR’s first long-short funds during his 12-year run at AQR.

As of March 2026 Quantinno’s assets were reported to be $48.4 billion across 10,600 individual accounts, up from less than $300 million five years ago, according to its website and public filings. This net assets figure has since been removed from Quantinno’s website, but in less than six months assets have further ballooned to around $70 billion, says one wealth advisor familiar with the firm's numbers. “I would call their success remarkable. I’ve actually never seen anything like it,” says Brent Sullivan, a tax analyst and founder of the blog Tax Alpha Insider.

Back in March, Sullivan estimated there were around $150 billion in net assets across long-short tax aware separately managed accounts or SMAs. He now pegs that number at around $170 billion among the four largest players: AQR and Quantinno, followed by Gotham Funds and BlackRock’s Aperio, with smaller players clamoring to get in on the gold rush. But it is Quantinno and AQR that are essentially in a two-horse race to dominate this market, each with around $70 billion in the strategy. “They are the biggest by a mile,” says Sullivan.

Kim would not be interviewed for this story, but it's clear that the firm’s explosive growth is coming from wealth managers whose clients are clamoring for sophisticated tax avoidance in light of the large gains afforded by the stock market boom. In fact, Kim initially launched Quantinno in 2018 as a tax-aware long-short hedge fund, but quickly pivoted to applying this investment strategy to SMAs, which are the core offering for hundreds of thousands of wealth managers with high-net-worth clients. Unlike traditional mutual funds or ETFs, SMAs can be tailored to each individual holder’s preferences and goals. There is currently estimated to be $4 trillion in retail separately managed accounts.

“We can customize what each strategy looks like for each client,” said Kim in a 2021........

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