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Explore investment strategies for 2023: Dive into the nuances of seeking alpha returns and understanding beta with Noviscient's expert insights.

We are thrilled to share some incredible news with you all. Noviscient has been shortlisted for the esteemed Asset Manager of the Year award at the upcoming Asia Capital Markets Awards. This recognition is a testament to the hard work, dedication, and innovation that define our approach to asset management.

There were many surprises for us at the start of 2020. The halt to life as we knew it, with contrary and questionable statistics, bringing the light the need for clear, reliable data. The impact to many of our portfolio companies, much of which is still unfolding, highlighting how much the manner in which a firm operates may not be obvious to investors[1]. One clear surprise for the investment community was how several investment strategies that had promised diversification or pure alpha returns transpired to correlate highly to the market.

Hedge funds managers are known to be secretive and protective of their trading strategies, the “secret sauce” that generates their returns. Very little on how they trade or what they trade is revealed to the public or even their investors. While funds managing over $100 million AUM are required to file quarterly reports to disclose their positions, these reports are seriously flawed on their completeness and timeliness.

Even before Burton Malkiel popularised the term in 1973, investors had begun taking random walks and applying other theories supporting diversification of their portfolios. Yet today, the investment community, in particular the decision-making community, might be observed to be concentrating.

The asset management industry is a data industry, handling information rather than physical goods. It is an industry that is managing $100 trillion in assets. It is an industry that impacts the retirement outcomes and future happiness for every single one of us.

Investors have three ways to generate returns in tradable markets. Invest in deposits or government bonds to earn a risk-free rate of return (time value of money); Take on various market and factor risks to earn the respective risk premia (betas); Find inefficiencies and dislocations in markets and capture this excess returns (alpha).

Singapore fintech firm Noviscient is looking to change the way investors find alpha via a technology driven platform that helps select and allocate to quality alpha funds.Scott Treloar, founder at Noviscient in Singapore, said the technology was similar to how Amazon provided a matching service for customers and suppliers. Noviscient’s platform, however, allowed the firm to tailor custom solutions for investors from trade data collected from participating funds, making it more than just a matching service.

A few years ago, as the chief risk officer at an Asian alternative investments firm, Scott Treloar found himself in an unexpected situation.The company, which had been managing over US$5 billion, was trying to raise capital for hedge funds. Treloar thought it would be a breeze.Much to his surprise, no one was interested – and they failed to raise any money.Investors said they weren’t keen on hedge funds, as those had been performing poorly for the past decade. In 2019, fund managers underperformed in the S&P 500 Index – a commonly used benchmark – for the ninth consecutive year.