How a U.S. Fundamental Fund Boosted Its Investment Narrative Insights Using GenieAI

Background

A prominent U.S.-based fundamental digital assets hedge fund was grappling with the complexities of managing a diverse portfolio that spanned liquid tokens, venture investments (SAFTs), and spot and perpetual futures trades executed across multiple platforms, including prime brokers, centralized and decentralized exchanges, and MPC providers. The fund's strategy required precise data management and in-depth performance and risk analytics, yet the process was cumbersome, time-consuming, and prone to inefficiencies. These challenges hindered the fund's ability to extract actionable insights in a timely manner, ultimately impacting investment decision-making and strategy execution.

Challenges

Data Silos and Fragmentation: The fund’s portfolio data was scattered across various platforms. Each data source came with its own format and structure, leading to significant challenges in data aggregation, normalization, and reconciliation. This fragmentation not only increased the risk of errors but also consumed a substantial amount of the research team’s time, detracting from their ability to focus on high-value tasks.

Manual and Inflexible Analytics: The fund’s existing tools required the team to perform much of the performance and risk analytics manually using Google Sheets. This approach was not only inefficient but also limited the depth of analysis possible, particularly when it came to real-time monitoring, accurate metric measurement, and rapid scenario analysis in volatile markets.

Wasted Resources: The inefficiencies in data management and analytics processes led to tens of hours wasted each week by key team members, including the Portfolio Manager, Operations Manager, and Research Analysts. These individuals found themselves mired in repetitive, manual tasks that could have been automated, preventing them from dedicating time to higher-level strategic activities such as optimizing portfolio allocations, refining risk models, and uncovering new investment opportunities.

Reactive Decision-Making: The manual processes resulted in a lag between data collection and actionable insights, leading the investment committee to often rely on outdated information during critical strategy meetings. The ability to quickly identify shifts in risk contribution or changes in individual token performance was severely hampered.

Solution

One of the hedge fund's Portfolio Managers was referred by a colleague from a different fund to Genie, an advanced Portfolio and Risk Management System designed specifically for the unique challenges of digital asset management. Genie provided a comprehensive solution that seamlessly integrated data from all relevant sources, including:

Multi-platform liquid token trading: Incorporating spot and derivative trades executed through prime brokers (with sophisticated execution algorithms like TWAP), as well as centralized and decentralized exchanges, ensuring comprehensive coverage.

Venture investments (SAFTs, SAFEs): Consolidating data across different types of venture-stage investments, each requiring unique pricing and vesting schedules.

MPC Providers: Integrating data from wallets provided by MPC providers to ensure secure and efficient handling of on-chain transactions and transfers to external trading venues.

Transformative Impact

Holistic and Real-Time Data Management: Genie’s powerful data integration capabilities enabled the fund to unify disparate data sources into a single, coherent dataset. This not only eliminated the labor-intensive process of manual data aggregation but also ensured that the data was accurate and up to date. The fund could now maintain a real-time view of its entire portfolio, enabling more agile responses to market movements and emerging risks.

Advanced, Automated Analytics: By leveraging Genie’s cutting-edge analytics tools, the fund’s research team could automate complex performance and risk analyses that were previously done manually or using error-prone Google Sheets formulas. The platform’s ability to run sophisticated risk models and performance attributions on-demand allowed the team to quickly assess how various factors—such as market conditions, sector exposure, liquidity, and execution fees—were impacting portfolio performance.

Proactive and Data-Driven Decision-Making: With Genie, the fund transitioned from reactive to proactive decision-making. Every morning, the Portfolio Manager could effortlessly present select data-driven views from the Genie platform, highlighting the return and risk contribution of each token in the portfolio. This shift not only enhanced the quality of discussions during investment committee meetings but also enabled the committee to make more informed decisions, grounded in the latest, most accurate data available.

Scalable and Strategic Insights: Genie's flexibility allowed the fund to conduct deep dives into specific assets or strategies, assess historical performance trends, and stress-test various scenarios. This capability was crucial for refining the fund's investment strategies and for preparing the portfolio to weather different market conditions, all while staying aligned with the fund's investment mandate.

Results

The implementation of Genie resulted in a dramatic reduction in time spent on data management and analytics, freeing up the research team to focus on generating alpha and refining investment strategies. The fund’s decision-making process became timelier, data-driven, accurate, and forward-looking, leading to improved fund operations and risk management. By leveraging Genie’s comprehensive suite of tools, the hedge fund not only streamlined its operations, but also gained a competitive edge in the highly competitive digital assets market.

In summary, Genie didn’t just optimize the fund’s operational efficiency; it fundamentally transformed how the fund approached portfolio management, enabling it to navigate the complexities of digital assets with greater confidence and insight.

Reach out to the Genie team on LinkedIn for more information on how Genie's cutting-edge Portfolio and Risk Management System can help boost your fund's intelligence and efficiency.

About GenieAI:

GenieAI is the premier AI-powered Portfolio and Risk Management System for digital assets, leading the industry towards smarter, data-driven decisions and automated workflows. The technology enables investors to anticipate market trends and navigate risks in ways that were once unimaginable—all while managing portfolios with unprecedented precision.

GenieAI helps leading fund managers to:

1. Enhance portfolio metrics

2. Predict market trends

3. Improve data-driven decisions

4. Automate analysis and reporting

5. Boost model performance

GenieAI's expert team of industry leaders brings unmatched AI and ML experience to investment management. GenieAI’s clients include some of the world’s most successful and well-respected digital asset funds.

GenieAI is backed by leading investors, including Coinbase Ventures, Bain Capital Ventures, Goodwater Capital, Sierra Ventures, Fasanara Digital, Arca, and other prominent firms.