Marex Spectron, the global commodities broker, has launched Nanolytics Capital Advisors, a business focused on developing alternative investment products based on Marex Spectron’s Nanolytics models.
Nanolytics was initially developed to meet the challenges in commodity markets that arose from the growth of High Frequency Trading (HFT). Utilising Marex Spectron’s institutional-scale infrastructure and systems, Nanolytics algorithms process billions of publicly-available data points, covering multiple commodity markets, to exclude the effect of HFT trades and deliver insights into the underlying demand-supply balances that signals likely future price movements (alpha signals).
Since March 2014, these alpha signals have formed the basis for a daily tradable index, which has been tracked and compiled by a global bank. Pro-forma results over this period show strong risk-adjusted returns, well in excess of comparable absolute return benchmarks, with minimal correlation to other strategies.
These alpha signals will form the basis of the Nanolytics Alpha Fund. Privium Fund Management (UK) Limited, an FCA-regulated investment manager, is the Fund’s AIFM, providing independent risk and compliance oversight, with Nanolytics Capital Advisors operating as Investment Advisor.
Early-stage potential investors are in the process of doing formal due diligence on the investment strategy and all elements of operations. The strategy is currently traded by Marex Spectron in a managed account structure until the Fund’s actual launch. It will be marketed to Qualified Institutional Investors only, with Bride Valley Partners mandated to assist in asset raising.
Guy Wolf (pictured), Global Head of Market Analytics at Marex Spectron and the developer of Nanolytics has been seconded to Privium to act as Portfolio Manager to the Fund. The Fund is restricted from trading base metals to prevent conflict with Marex Spectron’s industry-leading LME business. All trading activities of the Fund are fully separated from the rest of the Marex Spectron group.
Ian Lowitt, CEO of Marex Spectron, says: “We are excited to bring this unique and innovative offering to market, leveraging the core intellectual capital of the firm. We believe that this offers investors a new and differentiated means of gaining exposure to commodities at a key point of the commodity cycle.
