TMQR

This phase of the product development offers professional investors or partners the opportunity to access proven proven trading strategies with the broadest mandate.  The prop trading operation uses sophisticated risk management styles and techniques unavailable in other investment vehicles based on TMQRs active strategy indexes.  The enterprise would be empowered to seek alpha opportunistically across all liquid electronically accessible markets. The prop trading opportunity set would deploy risk limited or hedged exposures with 3-5 times leverage to target returns in the 20-30 % annual range with a draw down around 15%.

The private nature of the enterprise would facilitate the development of specialized products  based on the partners requirements.

The prop trading enterprise would look to raise $15 -20 million USD and

rapidly deploy capital across a variety of assets classes based on the research product of TMQR.  TMQR is the research and development arm of TML a pioneer in the Systematic and Quantitative investment space.  Key partners here would include Family offices, Venture Capital funds and Angel Investors who are underexposed to financial markets or in need of a liquid alternative to real estate.

A well established category of the alternative investment space the CTA / ADV categories would offer an outlet to monetize versions of strategies developed within the prop trading operation that have been domesticated and suitable to public consumption. Typically run through separately managed accounts this type of business has collected around $370 billion in assets and commands 1-2% in management fee plus a 10-20% performance fee.  The automated nature of the TMQR research and execution model would offer the possibility to disrupt this corner of the money management business in both the exchange traded derivative and conventional equity space.

The CTA/ ADV businesses  would require another separate legal entity with plans to offer programs to individual and institutional investors domestically and internationally.  Prop trading partners networks and word of mouth would help to swell the client base of this business segment.  To cover the start up, registration and offering documents plus legal and accounting a capital raise of $7-$10 million would be required.

 A growing and often overlooked business segment is the Alpha capture or Alpha as a service segment. This has emerged from two coincident forces the MIFID II regulation in Europe which required the  unbundling of research which led to the establishment of firms like TIMS https://www.timgroup.com.  At the same time firms like Quantopian and Numeri have attempted to build platforms to crowd source alpha to be used a research input to hedge funds.

​The essence of the business here is to sell alpha signals to qualified end user across a range of asset classes. The alpha as a service arm would be another  way to monetize single product signal research developed for the prop trading and CTA / ADV businesses.  Specific teams would be tasked with developing and maintaining  products for distribution on existing alpha capture and crowd sourced alpha platforms. 

After the other lines of business have been established the launch of a Hedge Fund vehicle for third party investors would offer the greatest upside for firm revenue in the form of a management and incentive fee. This vehicle would be required to clear  a number of  regulatory hurtles in addition to the formation of a number of new legal entities.  Start up costs could be $2-4 million as there could be possible synergies with the CTA/ ADV startup.

Revenue Estimates By Segment

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