Goldman alum, high-stakes gambler ready AI currency hedge fund
(Bloomberg) --Sweden’s Century Analytics AB is betting artificial intelligence will give it the leg-up needed in currency trading to succeed where other hedge funds are failing.
The Malmo-based company, founded by a former Goldman Sachs analyst, a high-stakes gambler and a programmer with background in military intelligence, is planning to roll out its CenturyOne fund over the next months. It will trade the world’s major currencies, allowing its bespoke algorithms to pick out profitable patterns in a high-volume, low-cost universe.
The company aims to launch the fund with about 100 million kronor ($10.3 million) and targets capital from institutional investors who need to hedge investments with alternative assets.
It joins a market where currency hedge funds have been struggling to survive over the past decade, in part because of a dearth of volatility. But volatility is making a comeback over the summer with growing concerns over a trade war between China and the U.S.
CenturyOne is aiming for an annual return of 10 percent, expecting volatility of 8-12 percent. The Eurekahedge AI Hedge Fund Index, which tracks 31 constituent funds, has returned 3.6 percent up until July this year.
“AI is beating humans in increasingly complex tasks, and while finance is extremely complex, it’s natural that AI will be able to find patterns and relationships that humans can’t,” said Hugo Langeen, a former musician turned gambler and currency trader who co-founded Century Analytics.
“Based on the interest we see, also internationally, there’s great potential for our fund to become big,” said Langeen, who’s partners include Niklas Hojman, who worked at Goldman and Jimmy Carlsson, who has a string of programming companies behind him.
“It would be easy to scale up as we trade on the liquid FX market,” Langeen said. “We’re in a good position. We’re taking in seed capital and are paving the way for the launch.”