Alternative investments consultancy launched

Making use of their skills in statistics and programming and expertise in high-frequency algorithmic trading, the partners provide a range of independent and confidential services to fund-of-funds and hedge funds.

The partners believe that whilst the industry is capable of self-regulation and informed investment decisions, true due diligence should extend to strategy and track record evaluation and more extensive performance monitoring.

For quantitative or algorithimic trading strategies this can be a non-trivial exercise and CIO’s are having to rely on spot-auditing or simple trust when it comes to strategy evaluation. Synokis is able to work with the manager/investor in an independent fashion to validate a real or pro-forma track record.

Once investment has been made, Synokis believes that compliance duties extend to more detailed analysis of the distribution of returns. Synokis provides monthly figure sheets that go beyond standard sharpe and VaR to give deeper insight into the fund’s performance. On-going monitoring of high frequency trading allows for ‘early warning’ bells to be sounded if the manner in which the fund’s returns are generated changes – allowing for early style- or returns-drift to be detected.

For the small to medium-sized fund-of-fund, a quantitative analysis department is expensive to run which may mean that such houses are unwilling to risk investment into quantitative strategies. Synokis is able to provide an outsourced ‘pay-as-you-go’ analytics service, providing full lifecycle support to the investment and instant access to sophisticated expertise for the investment manager at a much reduced cost.

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