Having invited potential clients to register an interest in its platform, digital investment manager Scalable Capital is now up and running in the UK.
With a successful operation in Germany, Scalable Capital has launched at a time of unprecedented uncertainty and volatility in global markets which has allowed it to showcase its unique proposition to best effect.
As he explained in an exclusive interview with the Muckler (Welcome to the Machine – how Robo-advice is ‘Democratising Wealth Management’) Managing Director, Adam French, says that unlike some platforms that offer model portfolios or those based upon tiered levels of risk, Scalable Capital dynamically allocates each investor’s portfolio according to a quantitative measure of their appetite for risk which it presents as a percentage.
For example, a ‘15% portfolio’ means that in a really bad year, there is a 95% chance that this fund won’t lose more than 15% – ‘We are able to target that because we dynamically adjust the risk of assets,’ Said Mr. French, ‘our technology-driven investment management service fills a vital need for retail investors: by putting risk
since the UK voted to exit the EU, Scalable’s portfolios rose by between 10 and 12%
management at the centre of our offering we aim to deliver superior risk-adjusted returns while keeping clients invested in the markets during periods of market volatility. We’ve received very positive feedback from clients in all countries following Brexit, as they saw this period as a litmus test for our risk management technology and are now confident to shift more assets into their accounts with us.’
Scalable has an internal team that narrows down investment opportunities, and inputs those into an algorithm to identify the ‘most liquid and cheapest’ appropriate assets.
It is this approach which helps clients to avoid excess risk without sacrificing potential returns, and in the month since the UK voted to exit the EU, Scalable’s portfolios rose by between 10 and 12%: ‘We still had a conservative risk allocation going into Brexit which helped us to outperform someone who has a high equity allocation and a portfolio with a lot of home bias. Both of those helped us do a good job on that day versus what we are benchmarking,’ French said.
‘The UK launch is a key milestone as we look to continue the strong growth of our business across Europe. We are already one of the fastest growing digital investment managers in Europe and currently manage more than 1,200 client portfolios,’ he continued.
In March, Scalable Capital announced it had secured £5.6 million of A-round funding, taking its total raise to £8.8 million which is being deployed to build out its UK client base, as well as to fund selective expansion into new markets.
‘The initial response from UK clients has been overwhelmingly positive,’ added Dr. Ella Rabener, CMO and UK co-Founder at Scalable Capital. ‘UK retail investors don’t just want a smooth online experience – they want an innovative investment service that offers a data-driven and more individually tailored approach to investing. That is what Scalable Capital provides.’