Founders: Adam French (U.K. CEO), Erik Podzuweit (co-CEO), Florian Prucker (co-CEO), Stefan Mittnik (technical advisor), Patrick Pöschl
Launched: 2014
Headquarters: London
Funding: $11 million
Source: Scalable
Founder and Managing Director, Adam French
This London-based digital investment platform is setting itself apart from other so-called robo-advisors by taking a more sophisticated approach to risk. Co-founder and U.K. CEO, Adam French, who spent eight years at Goldman Sachs, believes individual investors are better served not by focusing solely on stock picking but by having a better understanding of the risk levels of their investment portfolios. He developed a product previously available to large institutional investors, at a fraction of the cost.
The company's risk-management model means that a client's investment strategy is assigned a percentage risk level based on his or her preferences. A portfolio of low-cost ETFs is put together, and if Scalable's model predicts that a client's portfolio is going to exceed that risk level, it is automatically reallocated to bring it back in line by replacing equities with bonds, for instance.
Scalable now has $125 million in assets under management, and its AUM is growing by $7.5 million each week, according to the company. Scalable keeps costs low — the investment management fee is 0.75 percent per year — and the ETFs the company uses, such as Vanguard's S&P 500 and iShares Emerging Markets, have an average total expense ratio of 0.25 percent a year. Right now the service is only available to investors in the U.K., Germany and Austria. The company has raised about $11 million from investors, including HV Holtzbrinck Ventures in Munich, Germany.
