Magnum Research, a robo advisory firm incubated by the Hong Kong University of Science and Technology, has announced the close of its Series A++ round of financing.
Major investors in the round include the Alibaba Hong Kong Entrepreneurs Fund and Bohai XingWang LP, a private equity fund managed by Bank of China International (BOCI).
The Alibaba Entrepreneurs Fund is a returning investor, having backed Magnum’s Series A funding round last year.
The fund was launched by Alibaba Group in 2015 to support entrepreneurs in Hong Kong and Taiwan.
BOCI, on the other hand, will not only provide funding to Magnum, but will also use the latter's robo advisory solution to provide automated global asset allocation to private banking clients.
Magnum has raised $10 million since its inception in 2015, and is licensed by the Hong Kong Securities and Futures Commission and the US Securities and Exchange Commission.
Last year, the firm launched a robo advisory solution, Aqumon, which uses algorithms and machine learning to help with asset allocation models.
The engine provides a range of quantitative strategies, including global asset allocation, tactical asset allocation, multi-factor model, statistical arbitrage, index arbitrage, and high-frequency strategies, at charges of 0.8% per annum in management fees.
The business-to-business version invests in mutual funds, exchange-traded funds (ETFs), stocks and bonds, connecting with the trading systems of financial institutions through application programming interfaces.
Aqumon also offers ETFs to Hong Kong’s retail investors through its business-to-consumer version.
Kelvin Lei, CEO of Magnum Research, told Citywire Asia that the firm has signed up with three private banks in Hong Kong and mainland China.
The company has also partnered with China Asset Management on its artificial intelligence-powered stock selection strategy.
In total, Magnum works with 30 domestic and overseas financial institutions – including banks, brokerages, insurance firms and wealth managers – across Hong Kong, mainland China and Singapore.
‘Asia's large and rapidly growing wealth management industry has many critical pain points including high fees, opaque business models, substantial home biases and poor customer services,’ Lei said.
‘Any improvements addressing these pain points will bring huge impact to the industry,' he added.