Attention, Interest Delay Debut Of Twitter Hedge Fund

Jan 26 2011 | 3:43am ET

A surge of investor interest in a proposed hedge fund making bets based on Twitter data has put the fund's launch on hold.

Derwent Capital Markets, which had planned to launch the fund next month, now says it hopes to begin trading on April 1, CNBC reports. The reason? Media attention over the past two months has sent client interest through the roof: Derwent has secured £25 million in commitments and has investor interest of some £40 million, a figure that's growing, according to founder Paul Hawtin.

It all proved too much for the London-based firm, which has just eight employees. So Derwent is ramping up its custodial arrangements and seeking "various investment and advisory services" from several banks before moving forward.

Derwent claims that its proprietary model gauging market sentiment from the use of so-called "calm" emotional words on Twitter, the social networking system, is 87.6% reliable when predicting the movement of the Dow Jones Industrial Average over the ensuing two to six days.

The system was first laid out by professors at the University of Manchester and Indiana University in October.


In Depth

Q&A: MackeyRMS's Chris Mackey On A High Tech Fix To Broker Votes

Jun 23 2017 | 8:17pm ET

The looming implementation of the EU’s MiFID II rules regarding research has put...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: Asia-Focused Hedge Funds Offer Great Opportunities

Jun 23 2017 | 3:33pm ET

Emerging market strategies have outperformed their developed-market peers for five...

 

From the current issue of