New Age, New Tools
Last week’s Google quantum computing news generated a lot of interest and spirited responses, from the cynical to the lyrical. For almost everyone using technology, the ramifications of the announcement meant few people wouldn’t have sat up and read/watched it. At ALPIMA we believe most asset and wealth manager C-suite members have already had their technology “wait… what?” moment. The few that haven’t are now being rapidly brought up to speed by colleagues, clients and management consultants. The concept of “leveraging technology” is firmly front and center, whether it be to improve productivity, accelerate the “go to market” of new ideas, industrialize the product cycle, enable customization at scale, or provide better, richer visualization to increase “digital engagement” with clients. The question is no longer whether something needs to be done with technology. It is how exactly.
Our experience working with firms large and small is that what is required is so strategically important, that the planning requires focus and very clear thinking, because it is as important as execution. As for execution, it must be based on technology that is inter-operable, because nobody operates in a vacuum, flexible in order to be able to cope with the inevitable complexity that comes with legacy, and adaptive so as to be what natural scientists call evolutionarily stable, i.e. able to evolve by adapting to future changes in time to avoid obsolescence. And, of course, it must be able to scale over and beyond the current boundaries of the business.
We have built the ALPIMA platform in order to help asset managers, wealth managers and product providers to remain competitive and differentiated while leveraging their expertise and their brand. There are five distinct traits which make ALPIMA different.
- Front-Office Focused. ALPIMA is focused squarely on the front office, an area that has been lacking new technology compared to the middle and back office for years. The front office, defined as the arc connecting research, product design, portfolio management, the CIO office and sales, is where new ideas emanate, where pitches are made, where feedback is gathered and where economic value gets generated. Helping the front office is first and foremost what ALPIMA is for.
- Horizontal. We built the ALPIMA platform horizontally, as opposed to vertically, so that it can seamlessly connect different front-office functions on one platform. This means product design, portfolio construction and sales and advisory teams can be linked in ways that were previously impossible, making the business more productive and enabling the required shift from a product-led model to a service-led, solution-driven model.
- Inter-operable. Nothing is forever, but legacy systems and vendors are here for a number of reasons. Rather than ignore them, or even worse, wish them away, we have designed the ALPIMA platform so it can integrate with multiple systems and vendors, which is key to becoming part of the enterprise production chain. The ALPIMA platform can connect to multiple data vendors, existing risk models, portfolio management systems (PMS), reporting applications, and any other systems either built in-house or outsourced.
- Easily Programmable. One of ALPIMA’s most distinctive feature is a dynamic front-end coupled with a powerful quant API, ALPIMA Tau, which we built on top of Python, and which writes code as users interact with the platform’s front-end. This means a new dynamic strategy can be designed with a few clicks. The code that is automatically generated is easy to read, understandable even by non-technical people. It can be edited and, if required, re-run iteratively to get to the desired solution. At ALPIMA we believe that competence is making the complicated comprehensible (while incompetence is the reverse). ALPIMA Tau, our powerful investment language for Python, exemplifies this.
- Portfolios as Objects. The powerful idea of object-orientation has helped drive progress in computer science, technology and business for decades. Starting from the observation that any portfolio, whether it be static or dynamic, can be described as a digital object, we apply object-orientation to investing. We call this Object-Oriented Investing™. As a result, any strategy can be built, optimized and visualized on the ALPIMA platform, be it a long-only portfolio of funds and ETFs guided by humans, a systematic equity strategy, or a long-short multi-asset strategy comprising individual securities and futures. The benefits of Object-Oriented Investing™ are many, starting with speed. The time it takes to design and test a new investment strategy can be reduced from months to a few hours. Treating portfolios as digital objects allows one to visualize the past (back-testing, historical performance, performance contribution, etc.), present (composition, breakdowns, risks, sensitivities) and future (Monte-Carlo simulations, likelihood estimates) with ease and unmatched clarity. It makes it possible to customize existing solutions with a few clicks. Last but not least, it is uniquely future-proof as it enables secure tokenization and is ideally suited to machine learning and AI applications. As with all good technological progress, handling portfolios as digital objects brings so many benefits that, for those who do, going back to earlier days soon becomes unthinkable.
Navigating the complex and fast-changing environment we are in requires more than an acknowledgement that technology is key. It requires foresight, new thinking and radically new tools, tools built from scratch for the challenge at hand, rather than adaptations of old technology built during, and for, a different age. And, yes, in time, quantum computing may even play a part.
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