SINGAPORE - 06/11/2018 — Finamatrix, a technology group since 2006 prepares to launch an AI-driven global hybrid technology fund in 2018.
Singapore-based Finamatrix is planning to launch an artificial intelligence (AI)-driven global hybrid technology fund, a world's first in using advanced AI methods for algorithmic trading and portfolio selection, plus investing in opportunities that grow with the AI evolution.
Founded in 2006 by ex-JP Morgan and UBS banker Dr. Lanz Chan, Finamatrix is a risk-control technology specialist, which recently bagged the Best AI Technology Firm 2018 and Most Innovative Proprietary Technology: Risk-CyberneticsTM Award by UK AI Global Media.
According to Dr. Chan, who launched a CSI300 index futures fund in 2010 with Ping An Securities when he worked for a leading Hong Kong hedge fund Galaxy Asset Management, “Since winning the AI award, there have been requests to offer a regulated fund that taps into the growth of AI solutions that increase productivity, which in turn helps alleviate the growing problems of aging populations and rising labor costs.”
“We understand AI and are able to differentiate what works and what doesn't. Jobs will be displaced with AI. For example, autonomous driving will displace thousands of drivers. So either people upgrade themselves, which may prove to be challenging, or invest in an investment vehicle to tap into this growth so that they do not lose out,” added Dr. Chan.
Furthermore, launching the fund has been in part motivated by observations that some pure equity technology funds have under-performed compared to equity benchmarks, while pure venture capital or private equity funds lack liquidity and maybe too risky.
Given the firm's position with its own technologies and access to shorter-term special-situation opportunities, Dr. Chan believes that predictable and sustainable returns are possible.
The investment strategies the firm employs are highly quantitative in nature which include volatility-arbitrage and risk-neutral strategies. The investment instruments are mainly global technology stocks or stocks that directly benefit from the AI evolution, a liquidity overlay of currencies, commodities, futures, and options for hedging, and in addition, a highly-selective and stringent portfolio of private companies with investment periods of one year or less, that would usually comprise high-quality pre-IPO opportunities.
“Our system scours 1,000+ instruments for opportunities in real-time and acts instantaneously without human subjectivity,” added Dr. Chan, who previously managed more than 300 million US dollars in currency derivatives.
Despite AI’s increasing role in the industry, Dr. Chan believes it will not replace fund managers as yet, but rather, will complement the fund manager.
“We need a continuous energy source that lasts for decades for AI to be a threat to the human race, but even then, we (humans) should be intelligent enough to build-in safeguards for ourselves,” added Dr. Chan, who recently moved back to Singapore after more than ten years in China and also consults for a leading Singapore dormitory asset manager Averic Capital Management which manages over 600 million Singapore dollars in assets.
More information can be found at www.finamatrix.com or Facebook: @finamatrix
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As a risk-control specialist, the firm is highly risk-averse. The core technologies of the firm include Risk-Cybernetics and MVSK utility optimization. MVSK stands for mean-variance-skewness-kurtosis, which is a framework for structuring large amounts of unstructured data so that the data makes sense, which can be then transformed into useful strategies. This black box allows machine-learning which is able to self-enhance to a certain extent. Collectively, the methods are able to calculate high-probability events which are continuously stress-tested, while being monitored by the risk management team. All this amounts to the capturing of alpha (excess returns above a predefined benchmark) with greater success.
Finamatrix has also started the world's first risk-management blockchain project named FIX cryptocurrency and is seeking to work with regulated cryptocurrency exchanges in-line with Singapore regulations.
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