Billionaires back new shipping quant fund
Google’s Eric Schmidt and a clutch of billionaires have backed a new quantitative hedge fund that mines global shipping data to track and trade international commodity flows, underscoring the burgeoning interest in new, technology driven approaches to investing as traditional hedge funds fall out of favour.
About 90 per cent of global trade moves by sea, and Boston-based CargoMetrics uses VHF radio transmissions to track the movements of more than 120,000 ships across the world, monitoring where they dock to gauge their type and size of cargo. The data are used to trade commodity prices and, occasionally, currencies and stocks via automated algorithms.
It might sound a little Orwellian, but we want to measure everything,
and create a real time map of the global economy
- Scott Borgerson, founder
As well as Mr Schmidt, the company is backed by Israeli shipping billionaire Idan Ofer; former Lotus chief executive Jim Manzi; Texan automotive billionaire Billy Joe “Red” McCombs; and Genel Energy founder Mehmet Sepil. The advisers include former senator Bill Bradley; Ed Morse, head of commodities research at Citi; and Gerald Rosenfeld, vice-chairman of investment banking at Lazard.
Mr Schmidt, who also owns a big stake in DE Shaw, a pioneer of the quantitative investment industry, declined to comment on his backing of CargoMetrics, but a spokesman confirmed that his family office, Hillspire, had invested in the company. CargoMetrics has so far raised about $20m, and its most recent funding round in September 2012 valued the company at more than $100m.
Blackstone, the alternative investment firm, is invested in the fund itself, but Mr Borgerson declined to give its size and performance since it began trading in March 2015 because of regulatory and legal constraints....MORE
