Read Havelock London CEO Matthew Beddall’s thoughts about the rise of data science and its increasing use in investment management as part of an article in Portfolio Adviser. Matthew also talks about how at Havelock London the aim is to use machines to leverage human capability, not replace it.
Listen to Havelock London’s Chief Data Scientist, Kate Land, answer questions about why data science has suddenly become a hot topic in investment management and how our take on ‘AI’ may differ from others.
Havelock London’s Chief Data Scientist, Kate Land, was recently a panellist at the FT & IHS Markit Data and Disrupted Technology Forum in London. Kate was on the panel titled ‘Chief Data Scientists: the CEOs of tomorrow?’ and contributed on the basis of her strong academic background in science and extensive professional experience of applying data science to investment management. Read more about Kate’s thoughts in this article: Data science: at the heart of business transformation
Havelock London, the new data-driven investment management company, announced today that it is now authorised and regulated by the Financial Conduct Authority (FCA). The company is the first to have successfully passed through the FCA’s new Asset Management Authorisation Hub, which was launched at the end of 2017.
Havelock London plans to manage a UK-domiciled, global UCITS fund launching later this year, with the aim of combining traditional investment management with modern data science and technology.
Matthew Beddall, Havelock London’s CEO, said:
This is a significant milestone in the development of Havelock London and moves us closer towards realising our ambition of building a modern investment management business. We had a very positive experience of the new FCA authorisation hub and are delighted to be the first company to complete the application process through this initiative. We are looking forward to managing a new product which reflects our long-held belief in value investing and our experience in using data, statistics and technology to make investment decisions. We think the exponential growth in data that the world is experiencing is something that can be harnessed to help us better understand the companies that we invest in.
What is data science?
A lot of people are talking about data science at the moment, but they aren’t always clear about what they mean. Here at Havelock London, we consider data science to be the activity of collecting and processing data, to gain insight and guide decisions, often within a business. A data scientist combines computing, statistics, and domain knowledge – in our case, knowledge of investment management – to identify where and how data can be useful.
You mean AI, big data, machine learning and all that jazz?
Not necessarily. Whilst the ‘data science’ term is new, what it is describing is not. Scientists have always made discoveries about the natural world from observations, and there is a long history of ‘quants’ working in finance and businesses employing analysts. What has changed is the amount of data that most businesses can now access, and an increased demand for people who can identify ways to leverage this data.
The technical activities data scientists are involved in vary with the domain, but the goal is usually to improve the effectiveness of decisions, or to automate them. In some areas useful contributions come in the form of technology that can capture and organise data. In other areas advances are made by better understanding complex data that already exists.
Ok, so what has data science got to do with long-term investing?
Let’s start by identifying some of the challenges faced by an investor:
Too much data, too much noise!
Someone making an investment decision today does not lack data; there are newspapers, TV channels, websites, businesses and individuals dedicated to providing data and commentary about the financial markets. What is difficult is knowing which pieces are relevant. Investors need to know how to filter the massive amounts of information at their disposal.
Vast amounts of uncertainty
No one knows exactly what is going to happen in the markets tomorrow, let alone over the next few years. Some events are more likely than others but there always remains the possibility that you will lose money. An investor needs to be able to understand the range of potential outcomes that they face.
As for the solutions… watch this space!