The document discusses the infrastructure overhaul undertaken by American Century Investments to enhance their quantitative research and portfolio management capabilities. It highlights the adoption of a new in-house quantitative research platform named Revor, which integrates advanced analytics, model building, and streamlined processes, resulting in improved performance and faster research turnaround. The transition is 75% complete, with positive outcomes and growing interest from other departments to utilize the new system.

1. Revolution Analytics Customer Day
American Century Investments
February 26, 2013
Tal Sansani, CFA
Quantitative Analyst
Portfolio Manager
Sampath Thummati
IT Manager/Advisor

2. American Century Investments: Company Overview
 American Century Investments | Kansas City, MO Notes
– Founded in 1958
– $125 billion assets under management*
– One of the 20 largest mutual fund companies
 Quantitative Equity Group | Mountain View, CA
– $8.5 billion in assets under management across 22 mutual funds and separate
accounts
– This group takes an objective, systematic, and disciplined investment approach
– Combines quantitative stock-selection models with portfolio optimization
procedures, to systematically determine which stocks to buy or sell.
– Fully Transparent Process: Stock-selection models are founded on
economically sensible ideas and implemented using carefully calibrated
statistical methods.
 The Team
– 10 experienced investment professionals with backgrounds in
finance, economics, accounting, mathematics, and statistics.
– Supported by a team of 4 IT professionals
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3. About Me: Tal Sansani
 Quantitative Research Analyst & Portfolio Manager Notes
 With American Century Investments’ Quantitative Research Team for 7+
years.
 Research Responsibilities
– Research and develop stock-selection signals (alpha) that systematically
inform our funds on which names to buy or sell.
– Research and develop portfolio construction techniques that help our funds
mitigate unintended risks and exposures.
– Monitor the performance dynamics of our models and asset positions with
proprietary analytics and attribution dashboards
– Currently putting research projects aside (briefly) to revamp our research and
production platforms:
 Helping lead the design and development of an end-to-end quantitative
research platform, built atop an internal/collaborative R-package rACI
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4. Revamping our Research and Production Platforms with RevoR
 In 2012, after years of pain and suffering, we initiated a move away from our
existing infrastructure… Notes
 Extensive limitations with our pre-existing platform:
– A disparate blend of CLOSED 3rd party financial software
– Functionally limited and difficult to customize
– Restricted to specific data vendors/sources/asset-classes
– Difficulty streamlining multi-dimensional processes
– Cumbersome and costly
 In-house Solution: a streamlined, scalable end-to-end quantitative platform
 Data Acquisition, Data Cleaning & Model Building
– RevoR w/ SQL, populated with variety of data-sources, and proprietary
feeds
 Portfolio Optimization and Strategy Simulation
– RevoR w/ powerful 3rd Party Optimization API
 Model Analytics & Performance Attribution
– RevoR w/ tableau (and existing R graphics/publishing packages)
 Production Processes
– Controlled environment, deployment
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5. rACI: A growing, multi-team, collaborative R-package within
American Century Investments
Data Feeds Notes
Market Data from Thomson American Century Quant Additional 3rd Party Data
Reuters (QA-Direct) Proprietary Data Vendors
rACI Package (w/ RevoR)
Data Acquisition Function Library
Model Building Function Library Portfolio
Optimization and
Simulation API
Analytics Function Library
Live Analytics
PRODUCTION MODEL GENERATION
AND TRADING PROCESSES

6. Immediate Research Benefits Gained By Infrastructure Revamp
 Why Research likes RevoR? Notes
– We love R, and all the benefits of the fastest growing open-source statistical
programming language, but with $8 billion on the line, we sought a trusted
enterprise solution for research and production processes.
– Optimized performance: We’ve observed our simulations to be 20x faster than
with base-R, vastly improving research turnaround
 Immediate Results: New RevoR-driven solution is a huge upgrade on our
pre-existing platform
– With improved analytics and streamlined research processes, we can better
understand the behavior of our models and more quickly adapt to material
market changes.
– Decoupling our investment processes from closed 3rd-party vendors has
allowed us to combine and analyze more types of financial assets (not just
stocks), leading to new investment products (combining credit
instruments, options, commodities, etc.)
– We can now leverage all the rapidly evolving libraries of R in our
research, leading to more proprietary and cutting-edge quantitative models.
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7. Example 1: Streamlined Research Simulations/Diagnostics
A 3-Step Process: Notes
1) Construct a stock-selection
signal and submit it to the
database
2) Run customized simulations
and pre-packaged analytics
3) Visit the Quant Research
Portal for the results
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8. Example 2: Opening up Our Research With R’s Rapidly Evolving Open-Source
Library
 By integrating existing financial Notes
The Economic
datasets with new/unique Ecosystem
information, while leveraging a
variety of packages available in
R, our group can explore new
avenues of research.
 In this example, we use
revenues between customers
and suppliers, to explore how
information travels through an
economic network.
 Note: R’s igraph package was
used for much of the internal
analysis, while Gephi was used
to construct the chart you see on
the right.
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9. About me: Sampath Thummati
 Responsibilities Notes
– Architect and design investment management systems to support quantitative
research and portfolio management.
– Production support for quant model generation and other investment
management processes.
– Currently leading the implementation of quant roadmap to build efficient cross-
asset class research platform for alpha generation, back-testing and analytics.
 R Experience
– R-user for couple of years now
– Integrating applications interfacing with R code
 Database, Java Components, Batch Scheduling System and Custom
applications
– Building configuration functions
 Error handling
 Application logging
FOR INTERNAL USE ONLY
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10. Technology’s Role in Innovative Quantitative Investment
Management
 ACCESS TO UNIQUE DATA-SETS Notes
– New, innovative investment ideas are the life-blood of our group, and by
extension, so too is our ability to process new information. It’s absolutely
critical for us to rapidly adapt to complex data-sets and new technologies.
 COMPUTATIONAL CAPACITY
– Controlled risk management and modern portfolio construction techniques
require sophisticated optimization toolsets.
 CUSTOMIZED ANALYTICS
– Building proprietary models requires proprietary analytics/feedback into the
model
 ROBUST DATA FORENSICS
– Proprietary data quality tools ensure inputs into trading processes go through a
battery of tests
 INDUSTRIAL STRENGTH PRODUCTION PROCESSES
FOR INTERNAL USE ONLY
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11. Immediate Production Benefits Gained By Infrastructure Revamp
 Why Production likes RevoR? Notes
– Open-source tools generally avoided in large-scale money management
 Revo support model
 Package verification and certification eliminates risks of malicious code
– Optimized performance
 Enables us to run overnight production processes in time for next business
day
– Business and production friendly programming language
 Research and production now share a common language, reducing risk of
errors in code translation
 Reduced time to production implementation
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12. Research-to-Production Transition
Notes
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13. What we did on the production side?
 Error handling Notes
– Intensive ‘try-catch’ use
– Storing images at the point of failure
 Robust logging procedures
– Easy to use calls to log
– Rolling logs
 Setup batch jobs
– Use of Rscript
– Handling return code
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14. Example
 Try-Catch Example Notes
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15. Example
 Batch example Notes
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16. What we did on the production side?
 Interface with dependency management system Notes
 Controlled processes to stabilize production environment
– Third-party packages
– Deploying application and modified packages
– Use of Rprofile for enterprise settings
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17. Current Status
 We are about 75% complete with our transition to RevoR Notes
 There is growing interest from other parts of the company to contribute and
employ rACI
 So far, we haven’t experienced any setbacks and are very satisfied with what has
been accomplished with RevoR
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18. Q&A
Notes
Sampath Thummati
st8@americancentury.com
Tal Sansani
t4s@americancentury.com
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