New York, May 3, 2018
Dear Friends and Colleagues,
Last year, I was on a conference call with an old contact who manages a fast-growing global portfolio. We were both glad to reconnect, after losing touch for a little while. And I was excited to show the analytic platform we had developed for capital flow analysis.
I started the call saying “We have been working very hard on this platform, and it now has more than 5000 individual time series on capital flows…”. That was supposed to be the appetizer to the actual presentation, with the main dish involving examples of how the tools can be used to generate alpha in the market. But we never got to the entree.
My contact simply said: “Jens, that is way too much information for us. We simply cannot track so much information; we do not have enough time”. The call never really got back on track after that. This was food for thought for sure.
We want our Global Flow Analytics platform to be world class, both in terms of the depth of the analysis and the raw data offered. We have successfully signed up a number of high profile asset management clients to this platform. But for some, the full solution can seem like “way too much information” in its raw form. For very busy PMs it can be hard to digest and absorb all the various details that can be important to building tactical and strategic views.
Over the last two years, we have been working towards building a complex solution for tracking and forecasting capital flows. At the same time, we recognize that there is demand for insights presented with a focus on simplicity. This is critical given the extreme time-management issues many portfolio managers are facing.
Maybe the best word for what we are trying to achieve is simplexity. A research product that draws on a very complex analytical foundation, but is presented in a very simple and easy to digest manner. Linked to this, we are working on a new front end that summarizes all the key signals into one simple matrix of conclusive signals (we will keep you posted as this gets completed).
This concept of simplexity may be important in a much broader sense. The general idea of simplexity could be key to effectively service a growing community of so-called “quantamental” fund managers that use large amounts of data and modeling in their processes, while still applying a human touch in the final investment decisions. We think simplexity will be increasingly important to how we develop our overall research at Exante.
Founder and CEO
Exante Data LLC