iMatchative and the power of AltX

 

Who is iMatchative and what do they do?

iMatchative was founded in 2012 by financial industry expert and entrepreneur Sam Hocking. After years of working in Prime Brokerage, Sam sought a way to use technology to effect change in the hedge fund marketplace in the same way that it had revolutionized other industries. The result was iMatchative. iMatchative is a data analytics and financial technology startup aimed at transforming the way investors search for and find funds that fit their investment needs, and funds find high quality investors. iMatchative’s flagship product AltX (short for alternative exchange), is turning heads and positioning itself to disrupt an industry that is inherently unautomated, offline, and people-driven.

 

AltX: the wave of the future or tech rhetoric?

Coming to market this past summer, AltX has quickly garnered the attention of some high powered investors to include Wells Fargo, Jeff Ubben, and Mexican Billionaire Carlos Slim. With the financial backing that it needed, iMatchative rapidly and effectively grew the AltX user base to over 20,000 fund managers and 16,000 funds in a few short months. AltX has the potential to eliminate the need for investors and hedge funds to pay third parties to perform due diligence and match investing strategies, risk profiles, and even personality traits.

Considered to be “the first two-sided financial platform serving both allocators and fund managers”, AltX uses an entirely new approach to aggregate information from sources as varied as regulatory data, real-time news, divorce records and even political donations. This information is then combined with iMatchative’s proprietary algorithms, social networking, machine learning, and behavioral data to create an efficient and streamlined process whereby the right investor is matched with the right fund. The analytics used are unprecedented within this market, providing users with individually tailored material that matches specific preferences and simplifies the decision making process by presenting a wider range of funds to choose from.

Apart from superior technology, iMatchative leverages its organizational structure and human capital to ensure it stays as innovative as possible. Combining into small teams, iMatchative employees will typically work together for two week “sprints” continuously iterating and refining new ideas and processes. Hocking did not assemble a typical team when he started iMatchative. Instead, he sought out individuals with expertise in many diverse areas to include backgrounds in physics, psychology, and engineering to foster a culture of thinking outside the box. Finally, if iMatchative can achieve and maintain critical mass within the hedge fund sector it can create network effects and scale to other financial spaces.

iMatchative charges a $30,000 licensing fee to investors and $15,000 to fund managers for subscriptions. The more of each that sign up, the more data the system can aggregate and the more efficient it becomes. iMatchative’s constantly expanding eco-system of data and people require an expansive infrastructure and responsive workforce to sustain the model over time. The company website claims that the synergies between iMatchative’s business and operating models can:

• Save time and money while accessing superior analytics and comprehensive data.
• Find more satisfying investment relationships through a better understanding of funds’ investment preferences and biases.
• Create the most beneficial risk-reward ratio with the platform’s search and optimization features.
• Find compatible investment relationships using cutting edge science and technology.
• Retrieve financial data that is bolstered by the science of behavioral finance.

 

The system is incredibly easy to navigate with a dashboard that puts all of the information at your fingertips. But the biggest challenge remains rooted in big data accuracy and how to protect it. By aggregating such an astounding amount of data in one place, there are bound to be factual inconsistencies. Moreover, how does iMatchative keep the AltX data, much of it public knowledge, safe from competitors?  To this point there have been no issues and both the business and operating models have proved effective, but as the company scales it will be put to the real test.

 

Sources:

http://video.cnbc.com/gallery/?video=3000409005

https://www.getaltx.com

https://medium.com/@getAltX/use-altx-to-identify-and-invest-in-the-right-hedge-funds-da5505585ba6#.j6ny5zsvh

https://medium.com/@getAltX/algorithms-and-the-art-of-matchmaking-c40491abc82f#.gr7xcjxbx

https://medium.com/@getAltX/behavioral-finance-and-the-power-of-self-knowledge-193d6a97304#.c8ymg2kel

https://medium.com/@getAltX/behavioral-finance-and-the-power-of-self-knowledge-193d6a97304#.c8ymg2kel

http://www.afr.com/markets/hedge-fund-models-face-disruptive-threat-20150915

http://www.businessinsider.com/one-of-the-richest-men-in-the-world-is-backing-a-startup-that-ranks-wall-streets-hedge-funds-2015-7#ixzz3h81HOoFR

https://www.kellogg.northwestern.edu/news_articles/2015/07062015-start-me-up-sam-hocking.aspx

http://cooconnect.com/news/altx-capital-introduction-revolution-to-cross-the-atlantic

http://www.ft.com/cms/s/2/b9677026-8b6d-11e4-ae73-00144feabdc0.html#ixzz3t7yvX2cz

http://www.ft.com/intl/cms/s/2/b9677026-8b6d-11e4-ae73-00144feabdc0.html#slide0

http://cooconnect.com/dominic-hobson/i-have-seen-the-future-of-cap-intro-and-it-is-called-altx

Conversation with Marco Iansiti, PhD