Alphacution Feed

Top Hedge Funds: AUM per Employee = Trading Strategy?

We have been playing with some new equations; looking to see if anything interesting can be learned from benchmarking assets per employee across various firms. (It turns out that adding this analytic to our suite of other "per employee" metrics yields significant insights.) In the figure below, we took the top 10 hedge funds ranked by assets under management (AUM) and then re-ranked that list by AUM per employee. We also tossed in Virtu Financial and KCG (Getco) for giggles - and to test the extremes. Notice anything interesting? Based on what you might know about these trading companies, how would you label the X-axis? Here's some additional data to consider: The correlation between assets and headcount is not perfect by any stretch, but it is signal-worthy. Also, this trick works best on mature, ongoing firms whose operations and business are relatively consistent. Headcount level doesn't seem to matter. Albeit at the extremes of tradings firms, Virtu Financial generated nearly US$800 million in revenue (2015) with 148 employees - so [...]

By | 2018-02-28T16:34:33-05:00 December 14th, 2016|Alphacution Feed|
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Digital Noise in the Fintech Space – Numerix Video Blog Series

In this FIFTH and final installment of a five-part video blog series Jim Jockle, CMO of Numerix sits down with Paul Rowady, Director of Research at Alphacution to discuss the recent FinTech Revolution. They discuss how firms are gearing themselves towards a digital culture, and how companies are working to distinguish themselves in this new age. The five videos cover the following: Part 1: Paralysis by Analysis: Preparation & Analyzation for Digital Disruption Part 2: IT Outsourcing and Transformation Part 3: Revolutionizing FinTech: Looking into the World of Data Automation Part 4: Technological Implications of Cultural Transformation Part 5: Digital Noise in the FinTech Space Jim Jockle (Host): There’s so much noise, right. And whether its hitting the trades or the New York Post, you know, this company’s going to take down Bloomberg, this company’s going to disrupt payments for the next rest of the world. I’m now dealing with Apple Pay, you know, just naming names not pointing fingers. How do you cut through the noise? Paul Rowady (Guest): [...]

By | 2018-02-28T16:34:40-05:00 December 6th, 2016|Alphacution Feed|
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Technological Implications of Cultural Transformation – Numerix Video Blog Series

In this FOURTH of a five-part video blog series Jim Jockle, CMO of Numerix sits down with Paul Rowady, Director of Research at Alphacution to discuss the recent FinTech Revolution. They discuss how firms are gearing themselves towards a digital culture, and how companies are working to distinguish themselves in this new age. The five videos cover the following: Part 1: Paralysis by Analysis: Preparation & Analyzation for Digital Disruption Part 2: IT Outsourcing and Transformation Part 3: Revolutionizing FinTech: Looking into the World of Data Automation Part 4: Technological Implications of Cultural Transformation Part 5: Digital Noise in the FinTech Space Jim Jockle (Host): So let me go to your research. You know you suggested a little bit, there’s the differentiators in terms of maximizing our opportunity and then there’s a congested middle-of-the-pack. Transitioning, so yes you had the Fords, who arguably have done very well in that or a transitionary period of time but you also saw the Hondas and Toyotas come out of nowhere and things of [...]

By | 2018-02-28T16:34:48-05:00 December 5th, 2016|Alphacution Feed|
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Revolutionizing FinTech and the World of Data Automation – Numerix Video Blog Series

In this THIRD of a five-part video blog series Jim Jockle, CMO of Numerix sits down with Paul Rowady, Director of Research at Alphacution to discuss the recent FinTech Revolution. They discuss how firms are gearing themselves towards a digital culture, and how companies are working to distinguish themselves in this new age. The five videos cover the following: Part 1: Paralysis by Analysis: Preparation & Analyzation for Digital Disruption Part 2: IT Outsourcing and Transformation Part 3: Revolutionizing Fintech: Looking into the World of Data Automation Part 4: Technological Implications of Cultural Transformation Part 5: Digital Noise in the FinTech Space Jim Jockle (Host): So, you know, you bring up one of the big pain fear factors though, is giving up the data, right. So, one of the biggest barriers to the cloud and you know we’ve seen this from different companies, you know and I don’t want Google, I don’t want Microsoft to have my data. I don’t want Goldman to have my data. How much, you know [...]

By | 2018-02-28T16:34:55-05:00 December 4th, 2016|Alphacution Feed|
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IT Outsourcing and Transformation – Numerix Video Blog Series

In this SECOND of a five-part video blog series Jim Jockle, CMO of Numerix sits down with Paul Rowady, Director of Research at Alphacution to discuss the recent FinTech Revolution. They discuss how firms are gearing themselves towards a digital culture, and how companies are working to distinguish themselves in this new age. The five videos cover the following: Part 1: Paralysis by Analysis: Preparation & Analyzation for Digital Disruption Part 2: IT Outsourcing and Transformation Part 3: Revolutionizing Fintech: Looking into the world of Data Automation Part 4: Technological Implications of Cultural Transformation Part 5: Digital Noise in the Fintech Space Jim Jockle (Host): What is the role of outsourcing? In the sense of at the end of the day traders are paid to trade. Financial advisors are paid to give advice and on the benefit and breadth of their customer base. Banks are meant to control and manage deposits. There’s still a fundamental core business but yet technology and the risk profile of all these institutions is the [...]

By | 2018-02-28T16:35:03-05:00 December 3rd, 2016|Alphacution Feed|
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Paralysis by Analysis for Digital Disruption – Numerix Video Blog Series

In this FIRST of a five-part video blog series Jim Jockle, CMO of Numerix sits down with Paul Rowady, Director of Research at Alphacution to discuss the recent FinTech Revolution. They discuss how firms are gearing themselves towards a digital culture, and how companies are working to distinguish themselves in this new age. The five videos cover the following: Part 1: Paralysis by Analysis: Preparation & Analyzation for Digital Disruption Part 2: IT Outsourcing and Transformation Part 3: Revolutionizing Fintech: Looking into the world of Data Automation Part 4: Technological Implications of Cultural Transformation Part 5: Digital Noise in the Fintech Space Jim Jockle (Host): Hi, welcome to Numerix video blog, I'm your host Jim Jockle. Joining me today is Director of Research at Alphacution, Paul Rowady. Paul, thanks for joining us again. Paul Rowady (Guest): Great to be here, Jim. Jockle:  So, want to talk again a little bit more about the Fintech Revolution and digital disruption trend that so much is being discussed on. But I think we [...]

By | 2018-02-28T16:35:10-05:00 December 2nd, 2016|Alphacution Feed|
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Feed Your Cognitive Taste Buds: Collaboration Will Expedite Validation

As you gorge yourself on the latest curated fire hose of content today, this post may waft onto your cognitive taste buds like a shameless plug. Fine. Like a herd of squirrels, here comes the next and the next and the next tweet anyways, just right for your canine attention span. It's all good, and no hard feelings. We will aspire to catch you with the next tidbit or on a different modality... But for those of you who care to pause and consider the deeper value here  - I offer this reminder and some inside baseball for your own creative purposes: In parallel with the mission to deliver uncommon and data-driven intelligence for the financial services (FSI) ecosystem, Alphacution was also founded to eat at its own kitchen - which is a practice that we have discovered over many years is rarely the case with research and advisory platforms. (By the way, not pointing any fingers - its not necessarily anyone's fault. Convention is a gravitational bitch.) Translation: If [...]

By | 2018-02-28T16:35:18-05:00 October 14th, 2016|Alphacution Feed, News, Press|
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Ding-a-L-ING Group’s Deconstruction

On Monday, 3 October, ING Group - formerly the Netherlands' largest lender and one of the world's largest financial conglomerates - announced plans to cut 7,000 jobs from its ranks of about 52,000 in order to invest in digital platforms that are expected to generate annual savings of 900 million euros ($1 billion) by 2021. Beyond this, what is fascinating about ING is the rare glimpse it gives us into the post-global financial crisis (GFC) dismantling of one of the world's financial behemoths. We have few other case studies - although, oddly enough, ABN Amro does come to mind - where we see the persistent "reverse-conglomeration" of a large and global financial services powerhouse. As a stipulation of the Dutch state-funded capital infusion in the wake of the events surrounding the GFC in 2008-2009, ING Group was essentially forced to sell off numerous businesses in order to maintain or exceed minimum capital ratios. The chart below details the timeline and more than 50 divestitures that have occurred since the GFC. Here [...]

By | 2018-02-28T16:35:25-05:00 October 4th, 2016|Alphacution Feed|
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Thomson Reuters publishes “Quantifying the Transformation”

Everything takes longer than you initially think it will. Never a truer statement made, particularly when it comes to the following: Negotiated, commissioned and subsequently developed  - and then re-vamped - for completion on an expedited timeline last spring (2016), our first annual deep-dive study into technology spending patterns among the largest global banks was only recently published by client-partner Thomson Reuters. We have referenced this work and output regularly over the past several months, but there is something special about having a partner bring it to light. We are grateful to finally put this corner-stone credential in place. Access Thomson Reuter's "chapterized" version here or the entire document here:  Enjoy.  There is much more of this output - and key developments surrounding that output - on the way soon...

By | 2018-02-28T16:35:32-05:00 October 3rd, 2016|Alphacution Feed|
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Navigational FinTelligence: The Method and the Madness

This post includes a metaphor, an anecdote and a vision.  Ready?  Here's the sketch: A magician - who was prone to playing the "long ball" - sought to develop the world's greatest card trick. True to form, the magician asks a volunteer to pick a card, sign his name to it, and put it back in the deck. The magician then claims to transport that card into a tree. When the tree was cut down immediately thereafter, the autographed playing card was found, encased in glass, nestled within the heart of the trunk. A weary traveler - and avid puzzle-builder - walks into the Louvre gift shop in 2002 and purchases one of the world's largest jigsaw puzzles. It was 8,000 pieces, when assembled, depicting an elaborate fresco created by Luca Giordano during the Habsburg Dynasty (known as "trigolo degli Asburgo"). The puzzle sat in its box until 2007 when - over the course of the next year - the puzzle was assembled on two adjoining sheets of 4' by 8' [...]

By | 2018-02-28T16:35:57-05:00 September 23rd, 2016|Alphacution Feed|
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