HedgeSpa: Powerful Predictive Analytics For Hedge Funds

Jul 21 2016 | 8:58pm ET

 Editor’s note: The immense gains in computing power and the advent of cloud-based services has resulted in a new generation of companies offering sophisticated predictive analytics platforms to the financial industry for much lower cost than ever before. The team at HedgeSPA, led by former BlackRock managing director Bernard Lee, has developed a quantitatively rigorous but highly customizable suite of services that are scalable, immensely powerful, and affordable to key market segments.

Company Name: HedgeSPA

Locations: San Francisco, Singapore

Website: http://www.hedgespa.com

Twitter Handle: @HedgeSPA

Elevator Pitch: Predictive analytics platform to help investment pros harness the power of the internet and massive computing to achieve outperformance never thought possible.

Year formed: 2011 

No. of employees: 10 - 20

Tell us a bit about your company and what it does.

Today, only the largest asset managers can afford to build their own sophisticated investment analytics platforms, for example, BlackRock Solutions sells BlackRock’s internal analytics platform to non-competing asset managers. However, most asset managers do not have access to such sophisticated investment analytics platforms due to its exorbitant pricing, high exclusivity and perceived competition. HedgeSPA aims to bring its trusted and equally, if not more, sophisticated investment analytics platform to level the playing field and to encourage fair competition among all asset management players.

How is HedgeSPA different than other companies in the same space?

The HedgeSPA platform allows professional asset managers to offload many day-­to-day investment and support functions (such as asset selection, portfolio construction, trade execution, and investor reporting) to an industry cloud platform at very competitive prices.

Our distinguishing factors that can help portfolio managers outperform include:

  • Proven and highly customizable tools to guide asset selection by testing all possible combinations of potential asset factors and market sentiments freely available online today:
  • Native tail risk enhanced portfolio analytics to dramatically improve upside to drawdown ratios;
  • Native multi-asset, multi-frequency support for portfolios containing a variety of asset classes targeting different investor taste;
  • Scalable multi-tenanted, security-hardened delivery on the cloud, or via virtualized local installations behind user firewalls;
  • Professional grade user interface designed and built by domain experts with hands-on investment expertise;
  • Content updated with frequently cited market research;
  • Combining content, price and delivery advantages from distracted competitors.

What is your revenue model? How will the company make money?

Our scalable platform and low operational overhead coupled with deep analytics sophistication allow us to deliver tier one analytics to our users at tier two or tier three prices, or a fraction of the cost of competing platforms.  

Who is your target market? How big is the opportunity?

The investment analytics market under the most conservative, traditional definition of a “site license” model is about $2 billion per year. By including the “seat license” model combining data and analytics, the total market size can be as much as $25 billion.

Why are you and your team capable of succeeding?

We’re positioned to disrupt, and we have top talent in our team. Founder and CEO Bernard Lee, Ph.D., CFA, was an award-winning managing director at BlackRock. As a member of its portfolio management group in New York, Dr. Lee put his Ph.D. thesis in quantitative finance into practice. Consequently, he won an industry award on that implementation, which BlackRock sold to its top customers to analyze full portfolios including assets not managed by BlackRock. Thanks to research and development grants awarded by the Singapore Government, Dr. Lee updated and moved these analytics to the cloud. Dr. Lee received his B.A., M.S. and Ph.D. from Princeton, Stanford and Imperial College London, respectively.

Co-founder and Head of Engineering C.H. Kua, Ph.D., is an accomplished scientist as well as former trader and market maker. He obtained his Ph.D. from an MIT joint program in Singapore. Dr. Lee and Dr. Kua have been working together for more than four years.

What is your company’s next target/milestone?

We have a highly detailed and precise roadmap to address the scaling up in terms of technology, implementation and support in anticipation of our next phase of growth.

With our cloud services and our strategic positioning, we are also widening the breadth of data through strategic partnerships to complement the deep analysis we currently offer. This includes partnership with an exclusive energy data partner bundling primary sources such as Platts, as well as a data provider of Chinese bonds and over-the-counter products, currently unavailable from customary “Western” financial data vendors such as Bloomberg and Thomson Reuters due to government restrictions.

Can you tell us one unusual fact about your company? 

The “SPA” in HedgeSPA is an abbreviation of “Sophisticated Predictive Analytics.” 


In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

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

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...

 

FINalternatives Trending

From the current issue of