Rikki Tahta, CEO Covestor

http://www.covestor.com/mbr/rikkitahta

6 Comments

    • Covestor and VesTopia: Winners and Losers from Peer to Peer Investing [view article]
      Hi Ezra,

      I honestly don't know.

      Figure the amount someone can make is going to be a function (however loose) of their popularity and their performance.

      In the offline world a registered investment advisor will charge somewhere between 1.5 - 3.5% of assets annually and a hedge fund will charge 2% of assets and 20% performance fee. You can't exactly replicate that on our platform as regulation will dictate how you can charge based on the location of both parties. However the best way to imagine it is, if I was an offline fund manager with 1,000 clients who each gave me $25,000 to manage, I'd be commanding fees of about $0.5m per year before any performance bonus.

      It's probably going to be south of that number in the above example. But the great thing about the internet is you can scale. In the offline world an investment advisor can't easily manage 100s of clients so will generally have a $250,000 minimum.

      Regardless - before any money changes hands - the one thing everyone needs first is a real track record.

      Have a look at our thinking here and the direction we are moving towards www.covestor.com/how/f.... This is a highly regulated issue so it is of neccessity work-in-progress.

      Cheers Rikki


      Regulatory disclaimer: please note Covestor is a real-trade sharing service. Neither Covestor nor its members are offering personalised investment advice and Covestor does not offer the opportunity for unregulated participants to advise each other directly. The above example is only a hypothetical example for a registered investment advisor managing client funds.       Jun 05 05:44 PM
    • Covestor and VesTopia: Winners and Losers from Peer to Peer Investing [view article]
      Hi Eli

      Quick comments and feel free to email me [rikki at covestor] and I will send you an invitation code to sign up and you'll see how the tracking works to account for portfolio size.

      Real money is always different to fantasy regardless of size - you can't have multiple real money porfolios running different strategies under different names, regardless of size - the SEC won't allow you to open a fake named brokerage account

      and see what happens with fantasy - contests.cnbc.com/mill...

      cheers Rikki       Jun 05 02:59 PM
    • Covestor and VesTopia: Winners and Losers from Peer to Peer Investing [view article]
      Hey Eli

      Presenting normalised statistics that accurately reflect what is going on is a real thorny problem. We want to present a simple "tear-sheet" like Morningstar or the funds marketing departments so people can gain a quick snapshot that is directly comparable to other funds or portfolios - eg click on my name above for an example. Needless to say none of the mutual funds, hedge funds or money managers willingly subject themselves to more than that scrutiny.

      But we're tying to go beyond that down to a sectoral or stock level to gain an insight for instance as to who has the best timing on a stock, or which ideas (paired trades or themes) might work. We're far from finished and we'll improve over time - we worked with the Finance Department of Columbia Business School in NYC to help us on some of those metrics - but (sorry if this is boring) in some issues there are a couple of performance measures one can use that are equally valid. Interestingly we interviewed a bunch of fund of funds in London to figure out how they required their reporting and the institutional world is frighteningly lax on standards. GIPS is the main standard, but even there people can cherry pick a little to present themselves in the best light.

      So in short its work-in-progress. We've decided in the short-term on a simple snapshot of the critical metrics and then an option to download data so you could run your own analytics over someone's past record while we improve.

      Hope that helps - should be in our help sections

      Cheers Rikki       Jun 05 01:49 PM
    • Covestor and VesTopia: Winners and Losers from Peer to Peer Investing [view article]
      Hi Guy, great to virtually meet you

      TOTALLY agree with you about how this world is changing. Its a $18 trillion dollar industry that is amazingly opaque. 10 years ago the fund management industry enjoyed scale economies - better access to information, better tools and better pricing. Thanks to REG FD, tools that brokers like E*Trade provide and new commission free accounts like Zecco, the playing field has been leveled. In fact its de-scaled as there are 50,000 investable equities worldwide and there are strategies a $5m portfolio can do that that $500m portfolio can't.

      It's great you're out to prove the same and I really look forward to us both giving the fat-cats in their panelled rooms in Boston and Zurich a run for their money.

      Cheers Rikki       Jun 05 01:30 PM
    • Covestor and VesTopia: Winners and Losers from Peer to Peer Investing [view article]
      Hi Ralph

      I'm one of the 3 co-founders and acting CEO. There are tons of issues we haven't touched on - particularly that elephant in the room - regulation. Its also mind-numbingly complicated to treat an individual account like an institutional hedge fund and maintain a normalised approach (ie take out cash flows for buying a car or getting a bonus) and maintain standardized performance metrics inline with GIPS. But that doesn't make for very compelling reading.

      The only other important factor is maintaining privacy - all data is normalized to percentages and members can have screen names. So while the track record you build is auditable and verified a participant can remain anonymous to other users and not reveal their net worth.

      Cheers Rikki       Jun 05 01:18 PM
    • Covestor and VesTopia: Winners and Losers from Peer to Peer Investing [view article]
      Security is completely central to our offering (see here www.covestor.com/secur...) which is why we partnered with the company that manages inter-banking passwords for the leading 100 global financial institutions, why we went through ISO 27001 certification, why we only have read-only access to data post-trade and precisely why we took so long to launch. (Although I also have to blame our head of Operations, who built similar systems in the institutional world for Goldman and GAM, for his obsessive testing over the last three months with security and audit companies)

      I did like Covestr - but one of my colleagues pre-registered it and is holding on to it in exchange for a window office       Jun 05 11:44 AM
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