Omega Point Blog

2018: The Year of Man + Machine

Omer Cedar

2018: The Year of Man + Machine

January 18, 2018

The Omega Point team and I would like to wish you a very happy, healthful and successful 2018!

As we kick off the New Year, it’s no secret that advances in machine-learning technology are shifting the investment management landscape toward more systematic strategies and techniques. According to Hedge Fund Research, a leading provider of hedge fund data and analysis, the quantitative fund industry is expected surpass $1 trillion of AUM this year, comprising over one-third of global hedge fund assets. Right now seven of the top 11 hedge funds by AUM run quant-oriented strategies and more than 70% of new fund launches in 2018 are expected to be quant-focused.

While rapid advances in computational power are changing finance at a rapid clip, this doesn’t mean that it’s too late for more traditional funds to join the party. The key for active managers to compete with passive funds for assets and alpha is the ability to harness AI-driven technology to optimize portfolio strategies while maintaining manager style and convictions.

Man + Machine > Machine

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At Omega Point, we believe that taking the best of both worlds, where human experience and insight are bolstered with machine-learning technologies, will consistently provide superior returns versus either standalone quant or purely fundamental strategies.

So we’ve created an easy-to-use portfolio optimization platform that seamlessly integrates into existing workflows and provides unparalleled flexibility to all types of fund managers. Our ‘Pillars of Flexibility’ include:

Model Flexibility

Fund managers should be wary of any approaches that require they adapt to the constraints of the technology. The Omega Point platform lets managers plug in any strategy, including the most complex custom models. Managers also can use any data source, both traditional and alternative. Traditional funds, quant funds, as well as hybrids all can benefit through:

  • Fine-tuning and improving underlying models
  • Harvesting different factors
  • Isolating alpha and removing beta
  • Identifying unintended bets to minimize risk exposure

And best of all, there is absolutely no limit to the number of models and different strategies that can be run!

Process Flexibility

Fund managers also need to be flexible in how they can use machine-learning technology in their day-to-day management process. Ever-changing markets require a precise way to quickly target different factors and drivers of performance in order to rebalance as needed. Different model variations can be continuously tested, and managers should be able to pick and choose those laser-specific areas where they need to focus. And a flexible process also opens greater potential for rich collaboration between the team – the quants to write programs and non-quants to interact with models.

Usage Flexibility

The Omega Point platform provides multiple ways for fund managers to access the system, suiting almost every type of style and workflow:

  • Secure, web-based GUI
  • Mobile applications
  • API to third-party Research Management Systems
  • Spreadsheet programs such as Microsoft Excel

Funds can mix and match how they interact with the system based on the needs of different groups across their organizations, and always have 24/7 access.

Experience the Omega Point Difference

Built by quants who have successfully managed multi-billion dollar portfolios using systematic strategies, Omega Point is democratizing quantitative investing with a turnkey solution geared for “non quants.” Our system makes it exceptionally easy for PMs to use quantitative techniques such as factor analysis, without the need for advanced quant resources and knowledge. Please reach out to us to learn more.

You also can see us in action at Battlefin Discovery Day Miami on January 30-31, 2018. We will be demonstrating the use of case of building factor-aware investment strategies leveraging alternative data. This promises to be an exciting and revealing event; we hope to see you there!