Five Firms Join First IA Fintech Cohort

Shanny Basar

The Investment Association has announced the first cohort of five firms that are joining Velocity, the trade group’s specialist fintech accelerator for asset management.

Chris Cummings, chief executive of the Investment Association, said at the official launch of Velocity last night that IA is the first trade association to set up an accelerator. The launch was hosted by Schroders, the UK fund manager.

Cummings said: “Technology causes friction and moves at a huge pace but it also creates new opportunities. You can stand and observe or engage with the problem and that is why we launched Velocity.”

A panel of 25 vetted all the applications, more than 30, and chose five successful firms – 9Fin, Essentia Analytics, Hivemind, ResonanceX and Util.

“The technology needs to answer a real business problem and achieve the most bang for the buck for clients,” added Cummings.

During the six month accelerator programme the cohort will benefit from access to the IA and its industry expertise, a bespoke co-working space and mentoring from the Velocity Advisory Panel.

Applications for the second cohort will open at the beginning of next year.

Graham Kellen, chief digital officer of Schroders, was chair of the Velocity Advisory Panel.

At the launch Kellen said Velocity was a major milestone for the investment industry.

“It raises the profile of fund management and makes it more attractive for fintechs to work in this space,” he added. “The buy side has made it clear to fintechs that we have an open door to innovation.”

Kellen explained that each applicant had to make a seven-minute pitch and the panel had a robust assessment criteria.

“We reviewed team strength, vision and their ability to execute,” Kellen added. “We also looked at their impact on the industry, how much they move the needle and how they quickly generate value.”

The program also aims to help to shorten time to market and help fintechs navigate a lengthy  procurement process within financial services.

The first cohort

The following five firms have been selected and cover the spectrum of technologies from AI and machine learning to blockchain, and big data and behavioural analytics, to provide solutions targeted to the needs of the asset management industry:

  • 9Fin

The firm uses artificial intelligence to help investors navigate the high-yield bond market.

  • Essentia Analytics

Essentia Analytics was also selected for PWC’s Raise Accelerator program for B2B scale-up businesses this year.

Clare Flynn Levy, Essentia chief executive and founder, said in a statement, “More and more portfolio managers are exploring how they can use AI and data in the investment process to answer questions such as “How can I measure cognitive bias?” and “How can I apply behavioral science to my investment process?”. Essentia’s combination of behavioral data analytics and specialist consulting has been proven to help portfolio managers address these questions, mitigate the cognitive biases found in investment, and improve investment performance.”

  • Hivemind

The fintech provides software to help companies build, clean and enrich data sets. The firm was originally the research capability within Winton Group, the hedge fund and data science company. Last year Hivemind was incorporated as a separate company offering services to third parties.

Dan Mitchell, co-founder and chief executive of Hivemind, said in a statement: “There’s a huge amount of value for asset managers, whether quants or fundamental investors, in unstructured data such as annual reports, regulatory filings, news articles, blogs, social media posts and so on. But it’s really tough to work with these sorts of sources in a flexible and accurate way.”

  • ResonanceX

ResosanceX also became one of the ten companies that joined Techstars Class 147 for the 2018 Barclays Accelerator Powered by Techstars in New York.

The company is authorised and regulated by the UK Financial Conduct Authority.

  • Util

The Oxford-based firm has developed a methodology that gathers and analyses data related to a company’s impact across the 17 UN Sustainable Development Goals.

For example, Util has built a series of machine learning models that derive the additional economic value associated with a company’s products and services. A healthcare company will create value as its sells its products, aligned to SDG 3, Good Health and Well-being. Conversely, a tobacco company will destroy value for the same SDG resulting from revenue generated through tobacco sales.

In March this year Util established participation agreements with Hermes Investment Management, the £33bn UK investment manager, and Actiam, €54.1bn Dutch responsible investment manager.

Leon Kamhi, head of responsibility at Hermes Investment Management, said in a statement: “The effective measurement of social and environmental returns to stakeholders, alongside the financial, is key to enabling the investment industry to deliver the holistic needs of beneficiaries and achieving the UN SDGs.”

Dennis van der Putten, director sustainability and strategy at Actiam , said in a statement: “Util’s new methodology builds on existing best practices. This is in line with the industry call to use more standardised data, which we at Actiam actively support.”

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