Startup Pitch Battle Absolute Wealth - FinTech Belgium Summit 2016
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Absolute Wealth is a robo-advisor dedicated to absolute return that uses hedge fund strategies with long and short investments to target positive returns regardless of market conditions. It develops quantitative investment strategies using machine learning and big data analysis of over 100 futures markets and 15,000 mutual funds. The company's business model involves partnering with private banks to provide its digital wealth management platform and investment signals to private clients, with the goal of growing assets under management and profitability over time. Its solution aims to offer transparency, efficiency, and a clearly identifiable investment universe to investors.
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Startup Pitch Battle Absolute Wealth - FinTech Belgium Summit 2016
- 1. Absolute Wealth THE FIRST ROBO-ADVISOR OF NEXT GENERATION DEDICATED TO ABSOLUTE RETURN
- 2. THE ISSUE : THE OLD CLASSICAL APPROACH
- 3. OUR SOLUTION : ABSOLUTE RETURN TARGET Equity indices Currencies Bonds Commodities
- 4. HEDGE FUND TOOLS IN THE HAND OF INVESTORS Portfolio optimization Long investments only Search for absolute performance Long and short investments Hedge funds Absolute return Market neutral Long/short Usual Funds Robo-advisors US Betterment Wealthfront Schwab Intelligent Portfolios TradeKing Core Motif Horizon France Advize Yomoni FundShop Robo-advisor Absolute Wealth Return on investment Investment cost
- 5. MARKET DATA DATA LAKE Market selection Strategy development Big data Machine learning PERMANENT MARKET SCAN MARKET DATA MARKET DATA MARKET DATA MARKET DATA MARKET DATA MARKET DATA MARKET DATA
- 6. MUTUAL FUNDS (LONG) Trading automaton Identification of long/short signals Digital platform Distribution of long/short signals Trading signals LONG/SHORT Investors signals LONG/SHORT TRACKERS (LONG/SHORT) A WORKING SOLUTION THE PROCESS OF SIGNAL DETECTION Applied on more than 100 Futures markets: Liquidity, Volume, Efficiency Selection on more than 15000 Mutual funds & trackers
- 7. OUR BUSINESS MODEL : A B2B STRATEGY Absolute Wealth
- 8. TURNOVER SENSITIVITY 2 4 8 15 25 # Private bankers Turnover (M€) 5 10 20 4030 60 100
- 9. Year Number of Private Bankers recruited Assets under Management (M€) Turnover in M€ (with an annual performance of 5%) Net Profit (M€) 2017 2 200 5.0 2.35 2018 4 400 10.0 5.09 2019 8 800 20.0 11.14 2020 15 1 500 37.5 22.00 2021 25 2 500 62.5 37.70 FINANCIAL KPIS
- 10. A FULLY DIGITAL SOLUTION: TRANSPARENCY & EFFICIENCY
- 11. A CLEARLY IDENTIFIABLE INVESTMENT UNIVERSE
- 12. AN OVERVIEW OF THE CLIENTS PORTFOLIOS
- 13. OUR 4 PILLARS ABSOLUTE RETURN TARGET FOR OUR INVESTORS AN INNOVATIVE “B TO B” BUSINESS MODEL HIGH PROFITABILITY PROSPECTS A WORLD WIDE SOLUTION
Editor's Notes
- To launch our digital platform, we are looking to raise 2 millions Euros.
- The classical robo-advisors are not efficient in turbulent or bear markets because they lose money. Why? They mainly duplicate the old classical approach : They use:”buy and hold strategy”. They apply “the portfolio optimisation”.
- Our robot advisor has 2 main strengths: 1/ it use diversification to generate performance in scanning 4 assets classes: equities, bonds, but also currencies and commodities. 2/It can detect bull but also bear long term trends and take advantage of them. So, it can generate positive return whatever the market trends: in bull or bear markets. Knowing that downside trends are just as common as bullish trends over a year, why should investors miss such opportunities?
- All the robo-advisors available on the market use Long investment only and target a large public whatever their financial capacity. Absolute Wealth adopts an opposite strategy, using both Long and Short investments and focusing on HNWI investors. In this respect, Absolute Wealth uses the same sophisticated tools than hedge funds.
- Our trading strategies are kept up to date by a permanent analysis of historical market data. By using big data and machine learning techniques, we detect changes in market behaviours, and adapt our trading strategies accordingly.
- The identification of trends and the delivery of long/short signals to our investors is done in real-time. The trading automaton operates on futures markets selected for their liquidity, volume and their efficiency. Once a trend is found on futures market, trading signals will be sent to the digital platform which scan more than 15 000 mutual funds and trackers. Then, a clear long or short signal will be given to our private bankers.
- We are focusing on HNWI, whose assets are already managed by private bankers. We will have access to those people by hiring private bankers with a minimum of 100 M Euros of AuM. With a limited number of private bankers, the assets under management (AuM) will be sufficient to seed the business and rapidly generate profit. Our « B to B » business model do not request the substantial marketing cost needed in any general public approach.
- The absolute performance target will allow us to take high rate commissions including management fees and performance fees. With a yearly performance between 5% to 15% , let’s see the turnover evolution according to the number of hired private bankers. For example: With 8 PB, the turnover ranges between 20 and 32 M€. And with 25 PB, the turnover ranges between 62 and 100 M€. The turnover increases dramatically with the number of hired private bankers.
- Based on low performance assumptions 5%, Absolute Wealth is profitable as of year 1. The net profit will be very high because operating costs represent a limited fraction of the generated turnover, and also because we not rely on advertising spending to expand our business.
- Our solution implements a fully digital approach across every channel: PC, Tablet, Smartphone…..which brings efficiency and transparency to our investors.
- We provide to private bankers a clear and real time vision of our investment universe, including the trend status as well as buy and sell signals.
- Private bankers can manage their client portfolios according to their risk profile. Clients have also a direct and real time access to check their portfolio.
- In conclusion, let me highlight our 4 pillars : Absolute return target for our investors An innovative B to B business model. high profitability prospects. And a world wide solution. Thank you.