A Groundbreaking Investment Firm.
Technetium, with atomic number 43, was the first “synthetically-created” element before it was discovered in nature. Tc43, initially an ensemble of 43 models, aims to be the first “synthetically-created” fundamental equity manager. While Tc43 operates over multiple time horizons, we can’t compete with Technetium, with isotope half-lives up to 4.2 million years.
Theoretically Grounded
Tc43 is grounded in traditional asset pricing theory and the Fundamental Law of Active Management.* Like traditional fundamental investors, we forecast company fundamental metrics that have a causal linkage with price. But we use quantitative tools to analyze more data over more time periods, diversify our views, and leverage quantitative portfolio construction.
Traditional analysts typically have deep fundamental insight into a relatively small number of companies. Even if they have skill, that skill is applied narrowly. Quantitative managers, on the other hand, use machines to make many more investments, but they typically lack deep fundamental insight.
Tc43 aims to achieve the best of both worlds. We use machine learning techniques and vast amounts of data for analytical depth on the fundamentals of each company. We combine this fundamental depth with quantitative tools to invest across many companies and to compete across many time horizons, increasing our cross-sectional and time-series breadth and diversifying our exposure. Our systematic fundamental approach uses quantitative tools and frameworks to modernize fundamental investing.
* Richard C. Grinold and Ronald N. Khan, Active Portfolio Management, 2nd ed., McGraw-Hill (1999)
Tech Enabled
Machine learning enables deep fundamental analysis across a broad cross-section of companies. Using modern, non-linear forecasting techniques, Tc43 analyzes thousands of data points for each company to build fundamental predictive models of company performance over different time frames. Then, we apply this process to virtually every company in the market, creating a dynamic multi-period portfolio with high cross-sectional and time horizon breadth. With access to new analytical techniques, expanding data sets, and Cloud processing power, Tc43 seeks to use machine learning to push the frontiers of fundamental investing
Conceptually Advanced
Systematic fundamental investing is an intellectual framework for understanding company fundamentals, market expectations, investor behavior, and investor time horizons. Different types of investors focus on different fundamental metrics and invest over different time frames, measured in weeks, quarters, or years. Investors update their expectations at different frequencies as new information becomes available. Tc43’s intellectual framework attempts to account for heterogeneous investor expectations, targets, and time horizons, and to profit as heterogeneous investor expectations converge toward Tc43’s forecasts.
