16. Scalable Capital

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

Founder and Managing Director, Adam French
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.

Latest Special Reports

  • In a world of big box retail and e-commerce, successful business owners are taking new paths to Main Street success.

  • Covid-19 is expected to be with us for years even if the colossal investment in treatments and vaccines eventually manages to contain and control the global pandemic. The world will look dramatically different in its wake. As businesses begin the shift from crisis mode to planning for the lasting impact of Covid, CNBC’s journalists will hunt for cases of companies and industries taking a leading role in shaping Our New Future.

  • Traders and financial professionals work on the floor of the New York Stock Exchange.

    CNBC’s financial reporters weigh in on what every investor needs to know when it comes to companies' earnings reports.

Tech

Business News