ableoverview 20161107
TRANSCRIPT
A B L E | M A R K E T S
CONFIDENTIAL
AbleMarkets
NOVEMBER 2016
Observe Market Activity No Human Eye Can See
Contact: [email protected]
A B L E | M A R K E T S
Agenda
2
1 Executive
Summary 2 Our Story 3 Team 4 Business
Overview
Contact: [email protected]
5 Market
Opportunity
A B L E | M A R K E T S
Benefits from AbleMarkets products
• Execution: Improve execution vs. VWAP by 500bps per annum on average
• Portfolio Management: Avoid HFT and improve long-only portfolio
rebalancing by 50bps per annum on average
• Risk Management
— Avoid trading when Flash Crashes are likely
— Catch out of control algorithms in seconds
— Improve portfolio management, volatility management with real-time
social media alerts
1 3
A B L E | M A R K E T S
4 Executive Summary
GAP
So we’re crystalizing Real-Time Risk Management in a simple framework
No-one has this technology – we’re the first mover
AbleMarkets – est. 2014 Data products to manage real-time risks for investment professionals Execution Portfolio Management Risk Management
Big Data techniques applied to market data, social media, news
Proprietary Intellectual Property = analytical algorithms
Volatility
Until now, there haven’t been tools to manage it
or to anticipate it
Real-time Risks are the main concern of Investment and
Financial Services Professionals
1
Contact: [email protected]
A B L E | M A R K E T S
5 Our Story
2014
2007
Intellectual
Property
begins with
Prop. Trading
2013 2009 2011
Publishing
• High-Frequency Trading, Ed. 1, 2 (Wiley)
• Quant Investors Almanac (Wiley)
2016 2015
AbleMarkets business:
• Value Proposition built
• Products launched
• Initial clients
• Trial marketing
AbleMarkets technology 2014-15: Platform built Models finalized
1st Conference
2nd 3rd 4th
Publishing
• Real-time Risk
(Wiley) AbleMarkets
launched
2
Contact: [email protected]
A B L E | M A R K E T S
• Two years ago we started AbleMarkets. We observed a gap between risks investors faced and the tools and techniques to manage those risks. The outcry against high-frequency trading, flash crashes and front-running didn’t match with how people use market data and monitor the news / social media.
• Our specific insight was that the investment community needed data products that anticipated when the conditions were ripe for real-time risks. Big Data offered the solution and we knew how to achieve it.
• What led us to this opportunity? Starting in 2007, when a previous company of ours did prop trading, we were aware that innovation in trading was moving in the direction of making use of large data sets, Big Data. We began to process very large amounts of market data, social media and news.
– Our Eureka moment was that we could take these large amounts of unstructured data and turn them into structured indices in real-time that monitor and anticipate real-time risks.
• How are we uniquely advantaged to build this business? We are first movers in our field. Our experience developing intellectual property regarding Real-Time Risks through thought leadership, algorithm development and product development
• Teaming. How do we know each other? We met while working at CIBC World Markets / Wealth Management in 2005. We are a Mom and Pop shop. We started working together on AbleMarkets in 2014 and so far we’ve brought our products to market, closed on our first clients, tested our value proposition with trial marketing. Now we are making the value proposition repeatable and scalable
6 Our Story 2
Contact: [email protected]
A B L E | M A R K E T S
Irene Aldridge – President and Head of Research
• Recognized expert on HFT, 20 years experience in Finance
– most recently, quant trading
– previously, quant risk management, large systems integration, software and hardware architecture, enterprise Internet security, software development
• BE Electrical Engineering Cooper Union, MS Financial Engineering Columbia U., MBA INSEA, 2 PhDs – Ops Research (Columbia, ABD), Finance (ABD)
• Member CFTC panel on HFT since 2011
• Author, “High-Frequency Trading” (Wiley, 2009, 2013, translated into Chinese), co-author of “Real-Time Risk” (Wiley, forthcoming)
Steve Krawciw [kro:sew] – CEO and Head of Institutional Sales
• 20 years of experience in financial product development, launch, business development, integration and operations
– Launched $4+ billion products at Credit Suisse (7yrs at Credit Suisse in product development, business development, technology and operations mgmt)
– Previously, asset management CIBC (4 years), 8 years at McKinsey & Co and Monitor Co in business strategy, spanning financial improvements, corporate reorganizations and acquisitions, restructuring and process improvements
• MBA (Finance) Wharton, BComm University of Calgary
• Co-author of “Real-Time Risk” (Wiley, forthcoming)
Team - Founders
Contact: [email protected]
3 7
A B L E | M A R K E T S
• For Hedge Funds, Pension Funds, Execution Managers and Other Investment Professionals
– Who want to manage real-time risk
– Who are looking to protect themselves from high-frequency trading, flash crashes and front-running
• Our offering is a suite of products for real-time risk identification across all markets. Our products are unique data feeds; the analytical algorithms are proprietary.
• They are a breakthrough because they use Big Data techniques on order flow / microstructure to develop insights on pricing and market movement. Analyzing only completed trades doesn’t generate the same insights.
• Our products are unlike the competition: no-one has developed real-time risk management products that specifically address investors main concerns
8 Business Overview: Value proposition 4
Contact: [email protected]
A B L E | M A R K E T S
9 Roadmap to Building a Successful Startup
Startup
Stages Idea Confirm Create Validate Repeat Scale Profitable Predictable
Vision
Prototype
Product
Initial
Clients
Go to
Market More clients +
References
Additional Products
Business
Model
Financial
Model
Exit
De-risking
the
business
Increasing Value
AbleMarkets
progress
Operations +
Support Functions
4
Less risky
More risky
Contact: [email protected]
A B L E | M A R K E T S 10
Subscription based data feeds
10
Packaged
Insight
Do-It-Yourself Tools
Portfolio Rebalan-
cing
Analyze Orders
Risk Mgmt. Indices
Analyze Transaction Costs
Organize your
Trades, Orders
Execution Algos
Analyze Internet of Things Datasets
Contact: [email protected]
Future Development
Social Media, News
Indices
Event Analysis
Powered by:
• Aggressive High-
Frequency Trading
Participation Index
• Institutional
Participation Index
• Flash Crash Index
• Abnormal Trading /
Runaway Algorithms
Index
4 10
A B L E | M A R K E T S
• How the market will evolve? – Investment Professionals are increasingly aware of real-time risks
• How will we will lead it? – AbleMarkets is light years ahead of the competition in being able to address real-time
risks for clients
– AbleMarkets has built its products, developed clients and a comprehensive scalable platform that will expand into new datasets and new financial markets.
• What is our mission? – Our platform enables and empowers our clients to manage real-time risk.
11 Vision & Mission 5
A B L E | M A R K E T S
Target Clients and Addressable Market (US only)
12
15,000 funds $360,000/annum $30,000/month
Assuming 2 products per client
6,000 $360,000/annum $30,000/month
Assuming 2 products per client
TOTAL :
Hedge Funds, Prop Trading, Family Offices X = $5.4B
Long-only Pension Funds X = $2.2B
+
=
$10.4B
Through its cutting-edge research, ABLE Markets is targeting the following markets, well in excess of $1 Billion potential: • 15,000+ hedge funds, pension
funds, proprietary trading firms and family offices
• 6,000 state and local pension funds
• 1,000 Worldwide exchanges • 50 major financial regulatory
agencies
Contact: [email protected]
5
8,000 Execution Teams $360,000/annum $30,000/month
Assuming 2 products per client
Execution Managers X = $2.9B
+
12
A B L E | M A R K E T S
Internet of Things companies
Competitive Landscape / Market Map
Low
News / Social Media focus
High
Analysis of Market Data
Social Media Quotient
$17M revenue
Raised $3M in funding in 2015
Aggressive HFT Index
Integrated with Thomson Reuters
Raised $5M in funding in
2014/15; $12M in 2016
Google is an investor
Acquired by CBOE in 2015
Analysis of Non-Market Data
Institutional trading activity
Runaway algo detection
News Analysis
IEX
5 13