Fina Technologies Aiming to Build Smarter Computer Models for Wall Street
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60 percent of the time (which may not sound much better than flipping a coin, but can translate into big wins over time). The firm’s confidence in its technology is apparent in its business model: it makes money by taking a cut of the upside that the platform provides to funds, Holden says.
The company’s patent license from Gene Network Sciences covers uses of the technology in e-commerce, government, and other non-life sciences sectors, but Fina determined that the financial industry was the best place to start outside of life sciences because of demand for better models among investment funds and other trading operations, Holden says.
Still, Fina has some large competitors in the business applying quantitative modeling and other technologies to investment strategy. Some of the larger and more well-established players in this field include New York-based investment firm DE Shaw Group, which boasts that it has spent more than twenty years and hundreds of millions of dollars developing quantitative investment models, and Renaissance Technologies, a hedge fund that uses computer-based models to predict market changes and to automate trades.
Holden is well aware of his competition, and he remains confident that Fina’s platform has capabilities that other technologies lack. He should know; he built financial models on Wall Street for a long time. After graduating from MIT in 1993 with a master’s degree in electrical engineering, Holden wound up working on the foreign exchange desk for Goldman Sachs in London. He later moved on to Deutsche and most recently worked for Countrywide.
In 2000, Holden met Gene Network Sciences founder and CEO Colin Hill and became what he characterizes as a small investor in the firm. Holden says he was impressed with the startup and Hill’s quantitative approach to drug discovery. He appreciated the firm’s idea that large computer models of cells could identify biological targets for drugs in silico, helping pharma outfits save time and money on physical experiments.
Gene Network Sciences is a major shareholder in Fina, and Hill is deeply involved in Fina as the spinout firm’s chairman. In fact, Fina’s technical staff and main operations are at Gene Network Sciences’s offices in Cambridge. Holden has led the startup from his primary office in Santa Monica, CA, and his home in Utah, while flying to the East Coast frequently to work with his staff in Cambridge.
Holden says that more spinouts based on Gene Network Sciences’s REFS technology could be in the offing. So stay tuned.