ableoverview 20161107

A B L E | M A R K E T S

CONFIDENTIAL

AbleMarkets

NOVEMBER 2016

Observe Market Activity No Human Eye Can See

Contact: [email protected]


Agenda

2

1 Executive

Summary 2 Our Story 3 Team 4 Business

Overview


5 Market

Opportunity


Benefits from AbleMarkets products

• Execution: Improve execution vs. VWAP by 500bps per annum on average

• Portfolio Management: Avoid HFT and improve long-only portfolio

rebalancing by 50bps per annum on average

• Risk Management

— Avoid trading when Flash Crashes are likely

— Catch out of control algorithms in seconds

— Improve portfolio management, volatility management with real-time

social media alerts

1 3


4 Executive Summary

GAP

So we’re crystalizing Real-Time Risk Management in a simple framework

No-one has this technology – we’re the first mover

AbleMarkets – est. 2014 Data products to manage real-time risks for investment professionals Execution Portfolio Management Risk Management

Big Data techniques applied to market data, social media, news

Proprietary Intellectual Property = analytical algorithms

Volatility

Until now, there haven’t been tools to manage it

or to anticipate it

Real-time Risks are the main concern of Investment and

Financial Services Professionals

1



5 Our Story

2014

2007

Intellectual

Property

begins with

Prop. Trading

2013 2009 2011

Publishing

• High-Frequency Trading, Ed. 1, 2 (Wiley)

• Quant Investors Almanac (Wiley)

2016 2015

AbleMarkets business:

• Value Proposition built

• Products launched

• Initial clients

• Trial marketing

AbleMarkets technology 2014-15: Platform built Models finalized

1st Conference

2nd 3rd 4th

Publishing

• Real-time Risk

(Wiley) AbleMarkets

launched

2



• Two years ago we started AbleMarkets. We observed a gap between risks investors faced and the tools and techniques to manage those risks. The outcry against high-frequency trading, flash crashes and front-running didn’t match with how people use market data and monitor the news / social media.

• Our specific insight was that the investment community needed data products that anticipated when the conditions were ripe for real-time risks. Big Data offered the solution and we knew how to achieve it.

• What led us to this opportunity? Starting in 2007, when a previous company of ours did prop trading, we were aware that innovation in trading was moving in the direction of making use of large data sets, Big Data. We began to process very large amounts of market data, social media and news.

– Our Eureka moment was that we could take these large amounts of unstructured data and turn them into structured indices in real-time that monitor and anticipate real-time risks.

• How are we uniquely advantaged to build this business? We are first movers in our field. Our experience developing intellectual property regarding Real-Time Risks through thought leadership, algorithm development and product development

• Teaming. How do we know each other? We met while working at CIBC World Markets / Wealth Management in 2005. We are a Mom and Pop shop. We started working together on AbleMarkets in 2014 and so far we’ve brought our products to market, closed on our first clients, tested our value proposition with trial marketing. Now we are making the value proposition repeatable and scalable

6 Our Story 2



Irene Aldridge – President and Head of Research

• Recognized expert on HFT, 20 years experience in Finance

– most recently, quant trading

– previously, quant risk management, large systems integration, software and hardware architecture, enterprise Internet security, software development

• BE Electrical Engineering Cooper Union, MS Financial Engineering Columbia U., MBA INSEA, 2 PhDs – Ops Research (Columbia, ABD), Finance (ABD)

• Member CFTC panel on HFT since 2011

• Author, “High-Frequency Trading” (Wiley, 2009, 2013, translated into Chinese), co-author of “Real-Time Risk” (Wiley, forthcoming)

Steve Krawciw [kro:sew] – CEO and Head of Institutional Sales

• 20 years of experience in financial product development, launch, business development, integration and operations

– Launched $4+ billion products at Credit Suisse (7yrs at Credit Suisse in product development, business development, technology and operations mgmt)

– Previously, asset management CIBC (4 years), 8 years at McKinsey & Co and Monitor Co in business strategy, spanning financial improvements, corporate reorganizations and acquisitions, restructuring and process improvements

• MBA (Finance) Wharton, BComm University of Calgary

• Co-author of “Real-Time Risk” (Wiley, forthcoming)

Team - Founders


3 7


• For Hedge Funds, Pension Funds, Execution Managers and Other Investment Professionals

– Who want to manage real-time risk

– Who are looking to protect themselves from high-frequency trading, flash crashes and front-running

• Our offering is a suite of products for real-time risk identification across all markets. Our products are unique data feeds; the analytical algorithms are proprietary.

• They are a breakthrough because they use Big Data techniques on order flow / microstructure to develop insights on pricing and market movement. Analyzing only completed trades doesn’t generate the same insights.

• Our products are unlike the competition: no-one has developed real-time risk management products that specifically address investors main concerns

8 Business Overview: Value proposition 4



9 Roadmap to Building a Successful Startup

Startup

Stages Idea Confirm Create Validate Repeat Scale Profitable Predictable

Vision

Prototype

Product

Initial

Clients

Go to

Market More clients +

References

Additional Products

Business

Model

Financial

Model

Exit

De-risking

the

business

Increasing Value

AbleMarkets

progress

Operations +

Support Functions

4

Less risky

More risky


A B L E | M A R K E T S 10

Subscription based data feeds

10

Packaged

Insight

Do-It-Yourself Tools

Portfolio Rebalan-

cing

Analyze Orders

Risk Mgmt. Indices

Analyze Transaction Costs

Organize your

Trades, Orders

Execution Algos

Analyze Internet of Things Datasets


Future Development

Social Media, News

Indices

Event Analysis

Powered by:

• Aggressive High-

Frequency Trading

Participation Index

• Institutional

Participation Index

• Flash Crash Index

• Abnormal Trading /

Runaway Algorithms

Index

4 10


• How the market will evolve? – Investment Professionals are increasingly aware of real-time risks

• How will we will lead it? – AbleMarkets is light years ahead of the competition in being able to address real-time

risks for clients

– AbleMarkets has built its products, developed clients and a comprehensive scalable platform that will expand into new datasets and new financial markets.

• What is our mission? – Our platform enables and empowers our clients to manage real-time risk.

11 Vision & Mission 5


Target Clients and Addressable Market (US only)

12

15,000 funds $360,000/annum $30,000/month

Assuming 2 products per client

6,000 $360,000/annum $30,000/month


TOTAL :

Hedge Funds, Prop Trading, Family Offices X = $5.4B

Long-only Pension Funds X = $2.2B

+

=

$10.4B

Through its cutting-edge research, ABLE Markets is targeting the following markets, well in excess of $1 Billion potential: • 15,000+ hedge funds, pension

funds, proprietary trading firms and family offices

• 6,000 state and local pension funds

• 1,000 Worldwide exchanges • 50 major financial regulatory

agencies


5

8,000 Execution Teams $360,000/annum $30,000/month


Execution Managers X = $2.9B

+

12


Internet of Things companies

Competitive Landscape / Market Map

Low

News / Social Media focus

High

Analysis of Market Data

Social Media Quotient

$17M revenue

Raised $3M in funding in 2015

Aggressive HFT Index

Integrated with Thomson Reuters

Raised $5M in funding in

2014/15; $12M in 2016

Google is an investor

Acquired by CBOE in 2015

Analysis of Non-Market Data

Institutional trading activity

Runaway algo detection

News Analysis

IEX

5 13

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