Lyxor Asset Management and Alphien have joined forces to launch the first-ever Alphathon. This ambitious initiative was created to explore the links between data science and value creation. With the participation of X-Finance, the finance association of the Ecole Polytechnique, the contest draws on both the academic world and the wider public. We had a chance to sit down with Arnaud LLinas, Head of ETF and Indexing at Lyxor Asset Management, and Lionel Semonin, CEO at Alphien, to learn more about this exciting project.
What was the inspiration for Lyxor and Alphien to join forces and launch this competition?
Arnaud LLinas, LYXOR: Lyxor and Alphien coming together was a natural fit, since both are pioneers in Europe driven by innovation. The inspiration came out of a discussion back in July, where we discovered a shared vision: that the use of technology in investment and portfolio management should be a tool available to all—not an exclusive, obscure science kept for a select few, but something that’s always just a few clicks away for anyone to access.
Lionel Semonin, Alphien: Innovation is definitely a driving force for both companies, as is expertise. Lyxor is a European asset management specialist while Alphien is a leading player in creating an “open platform” where users can safely protect their investment algorithms. A lot of asset managers seek to protect technology and guard it for themselves but Lyxor shares Alphien’s vision of keeping technology accessible. Lyxor’s professional ETF tools represent the perfect building blocks for an open competition (or “Alphathon”) on Alphien’s platform—a bridge to the academic world, which plays a major role in the competition.
One of the competition’s most noticeable feature is the use of data science. How does the data science within the contest differ from what’s normally done on a day-to-day basis?
AL: The simple answer is that there is no difference. That notion is at the very heart of the competition: offering contestants the chance to step right into the shoes of a professional asset manager, with all the resources and tools that would be available in a real-life scenario. What makes the use of data different in this case is that it is open to all—non-professionals and academics.
LS: Good, sanitized and ready-to-use data for quantitative finance is hard to find. Lyxor brings a valuable set of data to the table—a rich resource for this sort of experimentation. Processing this data to be used by participants on a fully integrated online coding platform—one that’s rich with tools—is where Alphien comes in. Indeed, these days, no modern asset manager can succeed without being armed with incredibly advanced technology. Data science in finance still proves highly sophisticated, requiring data, technology and talented individuals.
What do you hope to achieve with the contest?
LS: For Alphien, we hope to achieve real democratization through giving an equal chance to all participants. In addition to the prize reward, the winner will also be eligible to receive significant benefits if his or her Alphien-protected algorithm is licensed. We hope that whatever is uncovered through the contest provides valuable insights to the professional investor and can be easily applied for real-life use through Lyxor ETFs. We have a shared belief in the growth of online collective intelligence—something we all see as a vital tool that can help overcome some of society’s most pressing quantitative challenges.
AL: For Lyxor, the objective is to democratize ETF and active investment knowledge. We are targeting a specific caliber of students with a passion for finance and driven by talent and innovation. The Alphathon is also open to the general public, casting the widest possible net in hopes of pushing into unexplored territory. Part of the real spark behind the competition is that we don’t know exactly what we’ll find. Beyond the idea of exploring a fruitful and dynamic collaboration with academia and amateur innovators alike, we are hoping for something truly new and unexpected.