Hedge fund platform Prophecy Asset Management allocates to Birch Island Capital’s new investment strategy
Prophecy Asset Management, a New York-based allocator and seed capital source for equity long/short hedge fund managers, has allocated USD30 million to a portfolio created by Birch Island Capital, a private investment firm in Cambridge, MA founded by a team of current Massachusetts Institute of Technology (MIT) students majoring in Economics, Finance and Computer Science.
Birch Island’s innovative equity investing strategy incorporates advanced methods of statistical machine learning combined with fundamental analysis applied to a scalable quantitative portfolio construction process.
“While scouting for innovative investment strategies, different trading methodologies and new launches, we were introduced by our Boston brokerage partner Weeden & Co to the Birch Island team, leading to an initial in-person April meeting and a July allocation of USD30 million,” says Jeffrey Spotts (pictured), CEO & Founder of Prophecy. “As an allocator actively seeking opportunities to deploy a steady flow of investor capital, we interview over 1000 managers a year from a wide range of firms, long-only as well as long/short strategies, start-ups, emerging and established managers.”
“We assembled our investment team of MIT classmates early in the 2016-2017 school year, each of us focused on a distinct aspect of collaboration toward launching our highly quantitative investment strategy, while realising the need to build an infrastructure supporting the business formation and strategy launch objectives,” commented John Reece, Birch Island’s Managing Partner & MIT Economics/Finance major. “Our backgrounds and interests prior to MIT and Birch Island include: trading and investing from age 15; computer science/economics double major interested in investments and business development. We have since added an advising mentor with over 25 years of professional experience in valuation.”