AlphaBlock Disrupts Global Financial Investment Industry with the Launch of Pay for Alpha

AlphaBlock Technologies Inc. (“AlphaBlock”) announces the launch of Pay for Alpha, the financial investment industry’s first fully automated pay-for-performance investment management solution. The solution is disrupting the investment services model with two significant innovations: one, by transforming the traditional financial investment fee model for the first time to pay for performance, and two, with the launch of a fully automated investment management solution powered by machines.

The global $100 trillion active investment management industry has traditionally operated with fund managers charging annual management fees of 1–5%. These fees are charged to clients irrespective of portfolio profit or loss. AlphaBlock’s new pay-for-performance model is designed to empower investors, asset owners and other intermediaries by charging “zero” upfront fees, and charging only a fee for “alpha,” a term used to describe the outperformance of funds against an applicable benchmark. In other words, investors only pay fees when the investment performance is successful.

This new pay-for-performance model is only made possible through AlphaBlock’s innovative technology and licensing “open-indexing” solution, which is a systematic, scientific, and replicable method. The technology is fully automated, and offers turnkey portfolio construction, rebalancing instructions, simulations, and analytics through APIs and customized formats on long-term investments. The technology delivers “alpha” by improving relative returns as compared to standard indexing benchmarks, reducing concentration risks in today’s benchmarks, and charging fees commensurate with performance.

“The investment industry, while funded by the individual investor up front, suffers from a lack of innovation and outdated fee structures. Our mission at AlphaBlock is to revolutionize the investment industry by replacing costly hit-and-miss portfolio construction with automation that consistently outperforms today’s indexes. The technology and pay-for-performance model puts the investor’s goals first, and disrupts the economics of investing as we have known it for the past century.”

— Mukul Pal, Founder & CEO, AlphaBlock

“We make many investments into yet-to-be-proven technologies, but AlphaBlock’s mission to democratize access to alpha got our attention as an out-of-the-box novel approach. The world is full of innovative ideas, but one sometimes needs to think differently to solve big problems.”

— John Stokes, Partner, Real Ventures

About AlphaBlock

AlphaBlock Technologies Inc. is a Toronto-based company on a mission to disrupt the investment management model by building machines that beat the market. Its Pay for Alpha “open-indexing” method has been calculated and validated by NASDAQ and has received an MIT Fintech award for its innovative technology. AlphaBlock is funded by Real Ventures and is a part of the MaRS innovation program. AlphaBlock intends to extend its current pay-for-alpha solutions to pay-for-alpha ETFs.