London, February 8 2016 Scalable Capital, a new digital investment manager, announced today that it is ready to launch in the UK after receiving its regulatory approval from the Financial Conduct Authority (FCA). Investors can now subscribe to the waiting list on the website before a public launch later this year.
Scalable Capital’s proprietary technology dynamically allocates each investor’s portfolio based on a quantitative measure of their risk appetite. The technology uses forward-looking projections, based on recent market developments, to measure the level of risk in the ETF products the client is invested in, and then reallocates their portfolio according to their risk limit. In contrast to traditional wealth managers, Scalable Capital adopts a fluid approach to the weighting of asset classes in its portfolios. This allows investors to capitalise on markets where risk is rewarded, and limit exposure to excess risk in more volatile conditions. This state-of-the-art technology is an institutional class investment product, available, for the first time, to retail investors, at a fraction of the cost.
“Our unique and dynamic risk management technology takes the digital investment industry to the next level. Our technology not only provides cost-efficient access to capital markets products, but also offers UK retail investors a more sophisticated investment methodology.” said Adam French, co-founder and Managing Director of Scalable Capital.
“Our globally diversified ETF portfolios are tailor-made to match each customer’s individual risk preference, and are monitored and optimised around the clock. This approach gives our customers the peace of mind they deserve. And all of this comes at a very low fee.” said Dr. Ella Rabener, co-founder and CMO of Scalable Capital.
Scalable Capital ensures that performance is not eroded by unnecessary costs. The total cost is 0.75 percent p.a of the average invested capital. This includes account management and custody fees, as well as all trading costs for portfolio adjustments. For comparison, the total costs of using traditional investment management services average around 2 – 3% in the UK (which includes total-expense-ratios and upfront fees of funds).
A selection of the best index trackers
By exclusively investing into carefully selected ETFs (Exchange Traded Funds), Scalable Capital operates completely independently from partner firms or distribution agreements. The company selects the best and most cost-efficient index trackers from more than 1,500 ETFs.
The portfolios are presently constructed using fourteen ETFs, which track indices in the four main asset classes: equities, bonds, real estate and commodities. Together, they cover more than 8,000 individual securities in almost 90 countries. That’s how Scalable Capital ensures that each portfolio is globally diversified.
An experienced founding team
The UK team consists of Adam French (formerly Executive Director of Goldman Sachs’s Trading Division); Simon Miller (formerly Vice President at Barclays Capital) and Dr. Ella Rabener (formerly Founder and CEO of Westwing Russia and Associate Partner at McKinsey & Company).
Its unique risk management technology was developed in close collaboration with Professor Dr. Stefan Mittnik, Director of the Chair of Financial Econometrics and Director of the Center for Quantitative Risk Analysis at the Ludwig Maximilian University in Munich.
Scalable Capital has closed one of the largest seed-funding rounds in the European FinTech scene, receiving funding of almost EUR 4 million in 2015. The largest investor is Holtzbrinck Ventures, one of the most successful growth capital funds in Europe. Additional investors include international firm Monk’s Hill Ventures and the German Startups Group. Furthermore, several well-known business angels such as Reiner Mauch (co-founder of Consors), Rahul Mehta (Global Managing Partner of Digital Sky Technologies) and Dr. Steffen Pauls (former Managing Director of KKR) support the company.
Scalable Capital has already launched in Germany in 2015, where it is regulated by BaFin, the German equivalent of the Financial Conduct Authority. The founding team are Erik Podzuweit (formerly Westwing Home & Living and Goldman Sachs), Florian Prucker, Adam French, Patrick Pöschl (all ex- Goldman Sachs) and Professor Stefan Mittnik.