Quantopian Capital Gets $250 Million From Steve Cohen – this is big news for a few reasons – i am not an algo person but here is my take
First off $250 million is a LOT of money even for Steve Cohen
Second this announcement was public (it could have been private agreement I think… so) Steve Cohen who manages his PR quite well wants to be associated with Quantopian and their brand
Obviously this is great for Quantopian regardless of terms this is such great press and publicity it is hard to think of anything that could be better
Big for fintech and future of investment advice, management and more
See the press release
Numerous news headlines have trumpeted major concerns about inflation, which has been at 40-year highs. But how should investors handle inflation as it pertains to their portfolios? At the Morningstar Investment Conference on Monday, Kevin Dreyer, co-CIO of Gabelli Funds, outlined some guidelines for investing in the age of inflation. Historic inflation Dreyer started by Read More
Big News For The Quantopian Community: Managing External Capital by John Fawcett, Quantopian
I have some wonderful news to share. Today, we’re announcing an agreement with famed investor Steve Cohen of Point72: Mr. Cohen has agreed to invest up to $250 million in a portfolio of algorithms managed by Quantopian.
With these new funds to manage we will be able to make larger allocations to more algorithms selected from our community. Licensed algorithm authors earn a royalty of 10% of the net profits generated by their algorithm. With larger allocations, profitable algorithms will receive larger royalty payments. Better still, we expect profitable algorithms to attract more capital from investors. I believe this will mark the beginning of a cycle: increasing capital, more algorithms, and more members earning larger royalties.
How could you receive an allocation? We offer all of the education and the complete platform you need to write a fundable algorithm. The getting started tutorial gives you the basics of the Quantopian platform. You can read what our Chief Investment Officer looks for in algorithms. You can also learn important advanced concepts by going through our lectures. To see how your algorithm does out-of-sample compared to the rest of the community, enter it into the contest. Whether your algorithm is eventually selected for an allocation or not, you will learn more about writing quantitative strategies, the market, statistics, and programming.
In addition to the investment capital, Point72 is making an investment in Quantopian the company, through its venture arm, Point72 Ventures. Quantopian is one of Point72 Ventures’ first investments, and we are delighted to have their double vote of confidence in our model. Quantopian will use the capital to help fund its operations. Perhaps even more importantly, Point72 Ventures is helping us access top vendors, prime brokers, and industry experts.
This agreement with Mr. Cohen and Point72 won’t change who we are, but it will dramatically increase the scale of what we can do. Everything you love about Quantopian remains the same: we respect and protect the intellectual property you create here; the platform is free and constantly improving; and select authors can earn a royalty based on performance.
We continue to improve and expand the tools, data, and education available to algorithm authors. Work continues on adding futures to our platform. We are expanding the breadth and frequency of our in-person workshop series. New data sets are being added regularly to the platform. And there many other author tools in progress, including a dynamic screen for tradable securities, an evaluation library to help you during idea generation, and more.
Some community members will be interested in the investing mechanics: Quantopian will evaluate and select algorithms to manage Mr. Cohen’s assets, just as we do today for our proprietary trading. The selected algorithms will connect to a prime broker through an order/execution management system (O/EMS) at Quantopian. From the algorithms’ perspective, everything will run exactly as it does today. It will take us a few months to get the infrastructure set up to put this money to work. We hope to have many more algorithms up and ready for deployment at that time. In the meantime, we’re continuing to fund new algorithms with our proprietary trading account, which has 10 allocations to community algorithms running today, and several more on the horizon.
It is a big day for the Quantopian Community (including those of us who work for Quantopian), and for the Quantopian model. Steve Cohen has a world-class track record as an investor and as a selector of quant managers. His faith in our approach and in your ability to create valuable algorithms is the ultimate validation of our work together. We hope that you share our excitement about the opportunities that come with this new capital, and that you feel the same pride we do in the validation of our shared efforts.
Thanks, and happy coding,
Steve Cohen Investing In Quantopian