My background is in computer science and I have my CFA as well. I was hired as a quant on the buyside and was seated among the analysts at my first fund. I began by spending my time answering questions for the PM and analysts. Basically, this involved quantifying and manipulating data – sometimes it was market data, sometimes alt data, and often it was data the analysts were tabulating on their own.
Analysts and the PM shouted over questions, emailed them or I would pull them out of the morning meetings. Guys would say, “Hey Sandeep…“
- how do I know what’s the best market multiple to use for my target? Can you analyze it not just over time but compare it across the whole sector?
- short interest has been increasing but insiders have been buying. Which should I be paying attention to?
- what is the credit card data predicting for sales and is that already in the name?
- how crowded is this stock? Do all the Tiger Cubs own this thing?
- is there a single metric that really drives this stock, I’m not sure I’m even looking at valuation the right way and my multiple may be wrong?
- is this stock tied to the British Pound at all?
- my stock is up 10% in the last week and reports tomorrow, can you help me figure out why and what to do?
- is the portfolio too exposed to growth and what trades could we make to bring it down?
The more questions I started to answer, the more they poured in. It was a natural evolution for me to begin to automate the discovery process in software. I spent 6 years iterating on the platform and expanding it exponentially working with visionary PMs at 2 hedge funds. The platform now encompasses the key daily workflows for an analyst, CRO and PM and goes way beyond answering the above questions.
The EDS platform empowers users to now answer these questions on their own and takes them to a deeper, faster level of insight than ever before.
The value of the platform to other funds was obvious and the two PMs agreed to back me to commercialize it. EDS was formed and we started offering the platform to funds in March of 2017. Today we have multiple clients and several more in pilot. We have start up funds who don’t want to invest in quant teams and we have $25B+ hedge funds that want sharper insight and investment structure.
Perhaps most importantly, EDS allows a PM to quantify his intuitive investment approach across his team while enabling each individual to fine tune it. It is a tool that not only allows you to control risk in the portfolio but lower risk in your business; as you have a more structured, and insightful framework to express your investment philosophy and scale your fund.
Like some of our PMs, you may want to show the platform to prospective investors to demonstrate how you have leveraged technology to generate increased alpha in your process. Thanks for reading.
Please email us and we will give you a brief demo: EDS Demo Interest
Sandeep Varma, CEO & Founder