When we created CogentHedge in 2000, the crying need was for a simple, accurate, unbiased and free research platform for hedge fund managers and investors. We were responding to the need among hedge fund professionals for accurate comparative statistical information. Back then, the professionals who dealt with alternatives on a daily basis did not have access to a single source of data that would allow them to quickly identify discrepancies in performance reporting, results attribution or strategy shifts. Our platform was designed specifically for these people. That was what we built, and it really hasn't changed since. It was a concept that resonated with the overall community and we took the approach that "if it ain't broke, don't fix it".
Times change, and our platform needs fixing. Managers are increasingly desperate to connect with qualified investors - and connections are increasing difficult to establish - and investors expect far more flexible tools than were available at the turn of the Millennium. To that end, we will be developing a new platform with greater functionality than is currently available, that operates smoothly on mobile media, and that will offer managers and their agents far more feedback about interested potential investors while also establishing mechanisms allowing efficient and effective capital raising.
We intend to expand capabilities within the following areas:
Granted, this is our bread-and-butter so the development of more powerful analytics is Job #1 for us. We will be introducing new performance metrics such as the Omega ratio (a measure of the likelihood of achieving an expected return), n-tile analysis of fund performance, currency conversion and dynamic (time-sensitive) performance ratio benchmarks. After all, it’s only statistics.
Different managers report different characteristics:
• Top portfolio holdings
• Sector exposures
• Geographic allocation
• Style allocation
• Sector attribution
• Style attribution
• Comparative Risk/Return graphs
We are working to create a structure that accepts much more discretionary information from the manager and then presents it in a meaningful manner.
Flexibility in the selection of presented data and report format will be vastly expanded. Modern technology makes this upgrade an obvious choice.
Technology to track investors' interests will allow for far greater market intelligence. This can be used proactively by managers and their agents, and can provide market feedback to our registered users.
Between The JOBS Act in the USA, the commencement of AIFMD in the European Union and the Swiss FINMA's rules regarding CISA distribution in or from Switzerland, the world is rapidly becoming more complicated. To meet these challenges, the CogentHedge platform will track applicable jurisdictions of both investors and funds, and will be able to control information access accordingly. One benefit of this capability is that an investor will be required to specifically request access to individual funds that would otherwise be blocked - thereby satisfying a key tenet of passive reverse solicitation under the European framework.
We are creating a Meet the Manager functionality into the platform that will allow the Manager (or its agent) to announce upcoming events and then pick and choose from investors' requests to attend based on detailed feedback regarding interest and purchase intent.
What new features do you want to see?
Social Media: The tubes of the Internet seem to be overrun by social media extensions for everything. Hedge fund investing is no exception. Do you think an informal discussion forum is appropriate for alternative investments? I don't, but I could be persuaded to change my view. There is, after all, a benefit to having multiple sources of information for any decision.
Synthetic Index Products: If there's a demand, I am sure we can help create and market an investable index. It is a very lucrative business for the index operator although quite risky for the investment manager.
Multi-advisor Strategy Trackers: Introducing the initial Wizards of Wall Street to mainstream investors was first pioneered by a few multi-series/multi-manager hedge fund products in the early 2000's. It didn't work out particularly well for the promoters or investors back then, but managers now may be more willing to cede their exclusivity (and liquidity) for a sizeable capital commitment. Does this model make sense to you?
Let us know what you would like to see in the new HedgeAlytix.
We look forward to hearing from you.
Senior Managing Member
WaterTower Research LLC
w. +1 609-642-6979
c. +1 609-462-7001