MELBOURNE, Australia--(BUSINESS WIRE)--Pulled together in home offices over the past 18 months, the Unhedged team hadn’t all met in person until the strict covid restrictions in Australia lifted. A true gig economy start-up, they are taking a huge swing at an industry dominated by global funds and institutional banks. Their app launched this week to the public after onboarding an enormous 8,000 waitlist with some bold expectations, claiming AI robots “beat humans at investing.” Led by co-founders Peter Bakker (ex-Google), Glenn Vanbavinckhove, PhD MBA, (Ex-CERN) and Saskia Albers (ex-Volt), they raised 3.1 million in equity to launch Unhedged to consumers.
The founders see the trend towards AI as perfect timing. “While we are a fair way off mainstream adoption, consumers are considering autonomous vehicles (AVs) while already speaking to AI chatbots and devices like Alexa at home,” says Peter, Unhedged CEO and an AI pioneer successfully investing via his own algos for over a decade. “People are craving products that help build their wealth and allow them to be competitive in markets typically reserved for insiders.”
“Algorithmic investing is out there, but not yet easily accessible to everyday investors who arguably would benefit the most from its knowledge and scalability. Democratisation in this area is inevitable,” says Saskia, COO of Unhedged.
Today, algorithms execute 80 to 90% of equity trading volumes according to HFR Inc. and the World Bank. In 2018, “quant” funds managed only $932B - a mere 1.2% of the total value of stocks traded, $77.6 trillion. Preqin notes that 23% of Hedge Funds in the equity space already use AI to generate trading strategies.
So - while funds are bounding into AI, where does that leave the everyday consumers? Quantitative investing has historically been incredibly expensive, with their PhD teams and supercomputers: investments that made most Quant Funds unreachable as they dealt with big chunks of capital. On top of that, most regulators have designated Hedge Funds as a "rich people's playground" and limit retail investors.
In academia, the pursuit of the AI holy grail is ongoing. Dr. Nitin Yadav of Melbourne University says: “We teach Algorithmic Trading to students. From the basic models and game theory, we add complexity with known risks and a few ’states’, the world quickly becomes non-linear.”
Now, thanks to the warp speed that AI and machine learning have developed, alongside greater accessibility to computing power, retail investors are getting a look into automated investing.
Unhedged is leading that charge. Their team walks and talks like a global capital fund; an in-house quant team that researches and delivers investing algorithms with a difference – It is available in the app store. Their early results are impressive, dominating well above the market, +0.65% compared to -3.33% benchmark (S&P500) for January 2022 for their beta release of around 1000 customers.
“While other robos were stuck with their predetermined positions and rode the market, among other proprietary processes, our algorithms run defensive states to mitigate loss,” says Glenn, the CTO and Chief quant of Unhedged.
Algorithmic trading strategy researcher Dr Thomas Starke is an advisor to Unhedged and said, “It used to be a space that was about absolute returns and High-Frequency Trading. Now, it’s accelerating towards quant strategies for long term investment.”
As financial literacy is being aggressively sought out by consumers, results will dictate where people invest. Early adopters on Unhedged can be joined this week as the App goes live to the public. “The returns I’ve made over the years algo-investing, I want to share,” says Peter with confidence.
The big picture opportunities of AI are at a tipping point and Unhedged are primed to help investors navigate how automation fits into their financial independence. We’ll likely see robo-investing competitors expand market share in the coming years. While the app looks world class and there are benefits in tech that helps consumers invest and save, the proof as always, will be in the pudding. For the Unhedged user base, it will be the returns that matter most.
