Powered By LEAN: Abbington Investment Group
In the next edition of our Powered By LEAN blog series, we feature Charles (Chuck) Waite, Chief Technology Officer of boutique independent wealth management and investment management firm Abbington Investment Group. Chuck spent some time with our CEO Jared Broad to discuss his firm’s investing strategy, how QuantConnect simplifies their operations & much more!
Broad: What’s your background story and how did you land at Abbington Group? What’s unique about the firm’s strategy?
Waite: Following 18 months of collaboration, I joined Abbington Investment Group in June 2017 as an IT professional with over 25 years of experience as an electrical engineer and manager. Having no background in the financial services industry, but having worked in a few startups in the Boston area, I was interested in applying machine learning techniques to investment portfolio analysis and helping Abbington’s automated trading strategies thrive. After establishing my position on the team, I began assisting the firm in constructing and applying our momentum-based strategies, which is what I still do today.
Based out of Portland, Maine, with offices in Boston and Washington, DC, we operate as an RIA for high-net-worth individuals and family offices applying a total, rather than relative, investment approach.
We pick a selection of assets that represent quality and the different macroeconomic environments that exist at any one time. From there, we allow our momentum models to select the assets to meet our investment objectives. Our focus is on global markets via our use of equities, ETFs, mutual funds, fixed income and derivatives.
B: How did you come across LEAN, QuantConnect’s algorithmic trading engine?
W: We began using QuantConnect last year after our previous platform, one of QuantConnect’s competitors, changed its business strategy. Being able to live trade on the same platform that we backtest our trading strategies on is crucial. This was the key reason behind our move to QuantConnect.
Peter Van Dessel, our Chairman and CIO, and Grace Toh, our CEO, first heard about QuantConnect from a London-based technical quant in their network. After researching the platform, we decided to transition our operations to LEAN. LEAN’s flexible environment, as well as its ability to connect to services outside of the platform, were additional benefits that sold us on the solution.
B: What’s innovative about the LEAN technology and how does it solve your previous pain points?
W: Beyond the ability to live trade, LEAN enables us to operate in a more stable and trustworthy environment. For example, as a client of QuantConnect, we have a say on matters related to broker API links or code changes because of the firm’s open-source approach — an influence that we value highly. As a client of QuantConnect, we appreciate their communication, and they make sure to keep users in the loop when they’re planning to make any changes or updates to the platform.
B: How do you see the open-source nature of LEAN as a benefit to hedge funds?
W: From our standpoint, it’s highly beneficial to be able to look into the code and see that it’s in an environment we can trust. That level of comfort is not only necessary for our peace of mind, but important to showcase to our clients, who put a similar level of trust in us.
Other algorithmic trading platforms have large benefactors behind them and run regular competitions. We like QuantConnect’s approach, as the firm has created an open-source environment with a diverse and sophisticated technical community. Access to these resources has been quite helpful to an early-stage fintech company like ours.
B: What’s up next in the hedge fund industry? What innovations are on your mind?
W: Although circumstantial, the hedge fund industry needs to prove itself once more by producing positive, uncorrelated returns, which are long overdue. The opportunities for alpha have decreased as the markets have become more efficient over time. Passive investment tools have been steadily increasing in popularity over the last decade, and hedge funds, once again, must showcase their utility by providing returns that are not just high, but also demonstrative of funds’ continued ability to create uncorrelated strategies.
Many firms in the industry are harvesting the same ideas. What’s interesting to us, via the use of QuantConnect’s platform, is finding diverse, true alpha opportunities in global markets.