Partner Products
quantumrock has been developing AI Platform-based trading strategies since 2016. We collaborate with big-name partners like Deutsche Bank and niche experts who are using our tailored strategies for their own investment products and platforms.
Equity Alpha
The quantumrock Equity Alpha strategy combines various alpha sources from long volatility (VIX Futures), short equity (S&P500 Futures), and equity recovery strategies (S&P500 Futures). quantumrock’s proprietary Machine Learning Platform screens the markets for trading signals predicting market corrections to generate so-called Crisis Alpha by timing positions according to the identified trading signals. Equity Alpha aims to enhance client portfolios in crisis times showing its capabilities best when added to a portfolio. Investors tend to typically see an improvement in their portfolio metrics, particularly in the form of an improvement in average returns and a reduction in volatility and maximum drawdown of the portfolio.
Instead of holding fixed exposures, quantumrock´s AI Platform predicts the market’s short-termed movements and enters/exits positions accordingly, thus minimizing the cost of protection and bleed-out during non-volatile periods. This technologically driven approach allows the Equity Alpha to outperform other protection approaches significantly.
quantumrock’s Equity Alpha is, therefore, an optimal diversifier in broader asset allocations and expected to improve the risk-return ratio of most client portfolios.
The strategy was developed for Paladigm Capital and is implemented in their listed certificate.
Developed For
Indicative Historical Performance
| Performance | Gross | Net |
|---|---|---|
| 2023 | -2.2% | -2.4% |
| 2022 | 23.0% | 17.2% |
| 2021 | 6.6% | 5.4% |
| 2020 | 33.9% | 25.5% |
| 2019 | 0.8% | -0.4% |
| 2018 | 46.4% | 38.1% |
| 2017 | -1.7% | -2.6% |
| Average performance p.a. | 14.0% |
| Volatility annualised | 11.7% |
| Sharpe Ratio | 1.22 |
| Sortino Ratio | 1.89 |
Source: QREQA (Bloomberg ticker). Please refer to our disclaimer on the right for important legal notices. The strategy is trading as part of the quantumrock Absolute Return strategy which has a track record since 02|07|2016. The quantumrock Equity Alpha strategy’s gross returns are published daily on Bloomberg (Ticker: QREQA) and result from a frozen calculation algorithm, which is stored in an audit-proof manner with a timestamp and, if necessary, is traceable/reproducible for third parties upon request. The metrics depicted below reflect gross performance unless indicated otherwise. The gross performance considers all costs incurred at portfolio level (e. g. trading costs) and assumes reinvestment of any distributions. Costs incurred at customer level such as management and performance fees are not included. Net figures additionally include a management fee of 0.95% p.a. and 15% performance fee. For product-specific returns, please contact our respective product partners. The returns of individual products and share classes may differ due to deviating cost structures.
Absolute Return
The quantumrock Absolute Return strategy targets market-independent returns via a dynamic combination of the most liquid asset classes: US equities (S&P500 Futures), US fixed income (10-Year US Treasury Futures) and volatility (VIX Futures).
The AI-driven investment approach aims to identify the optimal allocations to the three asset classes on a daily basis to generate market-neutral returns. To achieve this goal, the strategy combines long equity and bond bias (beta) and alpha-generating sub-strategies resulting in highly dynamic allocations to the three asset classes. In addition to market-neutral returns, the quantumrock Absolute Return strategy tries to generate so-called Crisis Alpha during market turmoil by combining various crisis alpha sources from long volatility, short equity, and equity recovery sub-strategies.
The strategy was developed for Deutsche Bank and is implemented in their dbSelect platform since April 2020. In October 2022 it was adapted for a Singaporean VCC managed by Golden Hill Asset Management.
Developed For
Indicative Historical Performance
| Performance | Gross | Net |
|---|---|---|
| 2023 | -1.5% | -1.8% |
| 2022 | -11.2% | -13.7% |
| 2021 | 2.5% | 0.5% |
| 2020 | 30.9% | 22.1% |
| 2019 | 18.3% | 14.5% |
| 2018 | 3.4% | 1.0% |
| 2017 | 4.8% | 2.5% |
| Average performance p.a. | 8.3% |
| Volatility annualised | 12.5% |
| Sharpe Ratio | 0.68 |
| Sortino Ratio | 0.97 |
Source: QRABSR (Bloomberg ticker). The strategy has been traded in various investment products since 02|07|2016. The figures for gross and net returns over the total term are made up of the product trading the largest volume in the respective time period, i.e. the managed account U1512035 at Interactive Brokers (02|07|2016 to 09|02|2018), the Opus Charter. Iss. S.A. Cpmt90 certificate with ISIN DE000A2HPGN7 (09]02|2018 to 29|04|2020) and the Deutsche Bank certificate on their dBSelect platform with Bloomberg ticker FXSTQRK1 (since 29|04|2020). The quantumrock Absolute Return strategy’s gross returns are published daily on Bloomberg (Ticker: QRABSR) and result from a frozen calculation algorithm, which is stored in an audit-proof manner with a timestamp and, if necessary, is traceable/reproducible for third parties upon request. The metrics depicted below reflect gross performance unless indicated otherwise. The gross performance considers all costs incurred at portfolio level (e. g. trading costs) and assumes reinvestment of any distributions. Costs incurred at customer level such as management and performance fees are not included. Net figures additionally include a management fee of 2% p.a. and 20% performance fee with high watermark. The returns for individual products and share classes may differ due to deviating cost structures.
Hard-Asset Fund
The gemstone market is set to experience a remarkable surge in the coming years, driven by a confluence of factors that are reshaping the industry. This growth is due in large part to increasing disposable income and thus rising demand for luxury goods, particularly in emerging economies.
According to industry experts, the global gemstone market is projected to grow at a compounded annual rate of 5.6% from 2023 to 2033, reaching an impressive USD 55.96 billion by 2033.
Investing in gemstones offers several advantages over traditional investments. They have a long history of providing reliable returns and are relatively immune to market volatility. Additionally, rare gemstones appreciate in value over time, providing long-term growth potential. They also exhibit minimal correlation with other asset classes, making them an attractive addition to a well-diversified portfolio. In the current economic climate, they may be particularly valuable as an asset that can offer protection against inflation.
However, the most substantial investment opportunity in the gemstone market lies in the cutting and polishing of rough gemstones. Experts estimate that the final value of a polished gemstone can be up to 5 times its original value, making this a highly attractive investment strategy for those with the right expertise and network.
Quantumrock’s comprehensive investment framework presents an investment-grade opportunity for investors to partake in this investment opportunity without the burdensome expenses and risks associated with the procurement of unpolished stones. The primary goal of the investment framework is to generate a 3x return on the original stock’s value and to capitalise it within 24 months.
The Investment Framework
Quantumrock’s investment vehicle (Level 1) owns a significant inventory of rough gemstones of about 80 kg of pre-cut Alexandrites and Emeralds of excellent quality. The inventory has been carefully evaluated by professionals from the Gemological Institute of America with an estimated rough stone value of USD 120 million.
The investment framework depicted below has been designed to deploy investor’s capital for the polishing of the rough stones held by the investment vehicle, with the potential for substantial returns on investment. Once polished, the market value of the finished gemstones is expected to be 2.5 to 3.5 times the raw stone value, presenting a significant profit margin for investors.
To enhance the investor experience, Quantumrock is structuring various funds (Level 3) tailored to regional requirements, providing investors with an excellent opportunity to invest in the opportunity. The funds include a Luxembourg RAIF for European investors, a Singaporean VCC for Asian investors, and a Cayman SPC for Middle Eastern, LatAm and US-Offshore investors. These funds participate in the value generation from polishing the rough stones by purchasing the exchange-traded certificate (Level 2). Alternatively, investors can invest in the certificate directly though the stock exchange. The exchange-traded certificate has a fixed term, with dissolution after completion of the polishing and sales process, or at the latest after 24 months.
Overall, Quantumrock’s investment framework is an attractive opportunity for investors looking to capitalise on the potential of polishing high-quality gemstones and realising significant returns on their investment.
The Process: From Rough Stone to Polished Gemstone
1. Rough Stone Stock Building
The first compartment’s stock of rough stones is of excellent quality and is comprised of pre-cut Alexandrites and Emeralds weighing approximately 80kg with a approximate value of 120 million USD. These exquisite stones are already in possession of the investment vehicle at the time of launch, ensuring a smooth start to operations. The investment vehicle is pre-loaded with rough stones and fully equipped to commence operations.
To ensure utmost transparency and accountability, the stock of rough stones is meticulously monitored by one of the top 5 global auditing firms. This firm conducts a comprehensive review of the stones’ origin, quality, weight, packaging, seals, safe keeping reports, insurance, and documentation. The auditing firm also validates previous valuation certificates, ensuring that the stones are indeed of high value.
Moreover, two independent experts from the Gemological Institute of America conduct a thorough revaluation of the stock of rough stones and issue take-over value certificates. This additional layer of scrutiny ensures that the stones’ value is accurate and verified.
2. Agent Selection & Polishing
The meticulous selection of the right external agents is a key component of the process. These agents are responsible for the transport, insurance, and logistics, as well as the polishing of gemstones. To ensure the highest standards of quality assurance and credibility, these agents will be screened, selected, and mandated through a rigorous vendor selection process.
This selection process will be thoroughly reviewed by an auditor, who will assess the agents. Once the selection process is complete, the external handling agents will organise the logistics to and from well-established cutting and polishing companies located in key regions of the global gemstone market, such as India, Thailand, and Brazil.
Each batch of gemstones will be evaluated on a case-by-case basis to determine which cutting and polishing company is best suited to handle them. After the respective procedures are completed, the cut and polished stones will be appraised, valued, certified, boxed, sealed, tagged, and insured.
Transporting both rough and cut/polished stones requires the expertise of transport and safekeeping experts such as BRINKS. These experts will handle the transport and safekeeping of the stones, ensuring their secure and timely arrival at their final destination. Overall, the external handling agents will be chosen with the utmost care, and every aspect of the process will be closely monitored to ensure the security and value of the gemstones.
3. Receiving & Storage
Upon completion of the cutting and polishing process, the finished gemstones will be transported to a high-security vault in either Luxembourg or Switzerland. These vaults provide the utmost security for the stones and will be their final destination until they are sold.
Upon arrival, samples of the stones will be taken to verify their documentation and certificates, ensuring that the stones match the documentation and that they are of the highest quality. This step is crucial to ensure the accuracy and authenticity of the gemstones, and it provides added confidence to potential buyers.
Furthermore, the auditing firm responsible for monitoring the rough stones will also oversee the cut and polished stones. They will conduct a thorough review of the boxes, weights, quality, documentation, and certificates, creating a final stock report that accurately reflects the value of the gemstones.
4. Sale of Polished Gemstones
The sale of the cut and polished gemstones will be facilitated through an extensive network of partners and agents, allowing for a global reach to wholesalers and private buyers. This network ensures that the gemstones will find the best buyers in the global market, maximising the value of the investment.
The handover of the cut and polished stones will occur at the high-security vault, providing an added layer of security to the process. Payment for the stones will be made against safekeeping receipts, which include complete documentation for the stones. This ensures a transparent and reliable transfer of ownership, which is critical for the success of the sale.
The extensive network of partners and agents will work diligently to find the best buyers for the stones, ensuring that they are sold at the highest possible value. This approach not only benefits the investment vehicle, but it also benefits the buyers, who will be able to acquire these high-quality gemstones through a trusted and reliable source.