You Can Now Build Your Own Fully Customisable Private Equity Investment Bot
We are announcing today the launch of the next version of AutoInvest. Investors can now choose to customise AutoInvest so that it invests in those deals that meet the criteria that he or she sets.
For the moment investors can select criteria based on sector, number of investors and percentage funded, but we will soon add other fields to the list of options. Investors who wish to stick with the “standard” AutoInvest and not customise will be free to do so as well.
This is a very exciting release for us, and for me personally, as it represents the initial realisation of a vision we have had for quite some time: algorithmic investing in private companies.
A step-change for private equity investing
Historically, investment in our asset class has almost always been a matter of manual deal-by-deal selection. Either the investor choses each deal to invest in directly, or he or she invested with a fund manager who made the selections.
In other asset classes, such as public equities, that sort of manual selection is one strategy, and it is the traditional one, but it is not the only one. As both data and technological capacity improve, more and more investors are able to develop theses about which factors correlate with investment success and then design algorithms which make investment decisions automatically based on whether those factors are present.
The new version of AutoInvest opens the door to this sort of algorithmic investing in our space. Investors who customise their AutoInvest criteria will, in effect, have developed a thesis on what types of businesses are likely to perform best, and through the customisation process they will be building a simple algorithm that triggers investments.
A unique proposition and this is just the start
For now this is all reasonably basic when compared to the public markets: the combinations of criteria from which public market investors can choose in designing an algorithm are exponentially greater than what we can offer with AutoInvest at the moment; and while our Portfolio Update, and investors’ own portfolio information, provides an initial level of data to help inform the criteria choices, we are a long way from having the kind of data that the public markets have.
But it’s a start, and over time our goal is to expand the functionality, and increase the level of data availability, in order to allow investors more and more choice in how they develop their theses and design their algorithms.
None of this means that we are moving away from individual deal selection. Many investors will want to continue selecting investments on a case-by-case basis, and we think that is just great. But by offering algorithmic investment alongside individual selection, we hope to be able to cater for the preferences and needs of a wider range of investors.
I hope you will take a look at the new AutoInvest, and if algorithmic investment is of interest to you, select your criteria and watch as it builds a portfolio for you.