In this era of technology many organizations are envisioning a growth path in diligent ways and heading towards success. RoboSig is creating a benchmark in Software Solution and Trading Strategies.
In the below interview with RoboSig the CEODieter Marlovics shared his insights behind the triumphant success of the organization in the global market.
Shed some light on the professional journey of the person heading the company.
CEO: Dieter Marlovics
Growing up, I was a competitive national tennis player and spent a summer traveling the pro satellite circuit and playing for Northwestern University. Because of this, I spent my younger years teaching tennis privately and ran some tennis camps for young kids. When I was 14 years old, and with the help of my parents, I started a tennis racquet stringing business that was relatively successful and gave me all the spending money I ever needed as a teenager, as well as swelling savings accounts that I took with me to college. One summer, I also worked as an evening checkout cashier for Brown’s Chicken.
As a grown-up, I did some network engineering consulting to pay the bills, and, as a senior, at Northwestern University I founded my first real startup called Hypermeals.com, which enabled online food ordering from local restaurants for delivery. In 1999, I saw an opportunity in the electronic futures trading space when I noticed a small Chicago floor brokerage firm didn’t so much as have email, let alone any meaningful technology whatsoever. I pitched the CEO of Gelber Group, LLC to fund the building of an electronic trading division inside the firm. Over the next decade as CIO, and my incessant entrepreneurial drive, Gelber Group evolved to become a highly profitable global algorithmic trading firm with over $100 Million in capital and more than nine data centers in three different countries. I sold my ownership stake in 2011.
In 2015, I launched and provided seed funding for ReallyColor, LLC, where we built patented technology that lets you turn your photos into coloring pages and custom coloring books, and have sold gift cards in Toys “R” Us, BJ’s Wholesale, Sam’s Club, and others. ReallyColor has been on a steady growth track for the past few years. It is profitable and generates tens of thousands of coloring pages each week (and accelerating).
At RoboSig, until March 2020, our fiduciary client partners had over $270M in allocations placed on our autonomous FX trading strategy. When Covid surprised the world, the company took an unexpected hit. However, the business has survived, is currently growing aggressively, and the future looks bright! I joined RoboSig as CTO in 2019 and was asked to lead the company as CEO in August 2021.
Please give us details about RoboSig and shed some light on its journey in the software solutions space.
RoboSig was co-founded by our CIO, Richard Preschern, who was an international competitive tennis player in Europe and also went on to play for Northwestern University in Evanston, IL. He developed the concept of our FX trading strategy while he was a successful FX futures and options trader in Chicago. He originally created the concept as a risk management tool to hedge his market making endeavors. At that time, it would have required a team of quantitative engineers to execute the first version of the RoboSig FX strategy manually with any sort of scale.
Richard wondered if it was possible to build a machine that could do it in real-time, efficiently, and without human emotion influencing any decision making. It is important to note that the RoboSig strategy would also work in other asset classes, though Richard chose the deeply liquid $6 Trillion/day FX market to make sure every trade the autonomous platform wants to execute is able to be filled with precision. Richard went on to recruit software and quantitative engineers to build the first version. It took years to figure out, but after several iterations, the answer has turned out to be a resounding YES. The rest, as they say, is history.
What were the challenges that you and RoboSig faced while entering the software solutions market?
RoboSig is a software company and not a fund. This tends to sometimes be confusing to people. We collaborate with a number of asset management, fund, brokerage, and other fiduciary partners. Our SaaS infrastructure can integrate with any prime broker, or execution environment. Our clients prefer to remain private so we can’t mention anybody by name.
The first pilot program began back in 2016, when the first live track trading the RoboSig strategy launched. Our partner was a large trading firm and fund manager looking to add a currency overlay strategy into one of their existing funds. Since we were still an upstart at the time, their initial trading size was small, but they grew steadily over a few years and eventually had over $250M allocated to the trading signals generated by the RoboSig platform and commanded double digit annual returns for their investors.
Brief us how exactly RoboSig is providing its exceptional services to the clients? What are the offerings?
The primary challenge that leading companies have is the fact that interest rates around the world have fallen to record low levels. In some areas of the world, they have even gone negative. Corporate treasuries, family offices, asset managers, and high net-worth individuals are all looking for ways to increase yield on their cash without dramatically increasing the necessary amount of risk normally required to accomplish that. With RoboSig software, any of our partners are able to take advantage of the company’s R&D, real-time analysis, and trading signals to do just that. Our trading strategies have a live track since 2016 with over 90% positive months. For those that don’t know what a Sharpe Ratio is, the higher the number the lower the risk. A world-class Sharpe ratio is usually considered to be 0.75 to 1. RoboSig software produces a Sharpe ratio of over 1.5. Our primary strategy at the moment focuses on the G7 currencies. Large global corporations, which manage cash sitting in different countries, would be able to turn that challenge into a profitable lower-risk opportunity by partnering with RoboSig.
RoboSig ALPHA is our higher return track. It’s mechanism is very similar to the RoboSig Cash Management Alternative (CMA) track, but incorporates a much higher amount of leverage to produce larger returns. Due to the deep liquidity of the G7 FX market and our asset management, fund, brokerage, and other regulated fiduciary partners, double digit returns have proven to be equally as consistent for their investors with the RoboSig ALPHA product.
What is the current scenario of the software solutions space? How does RoboSig fit into its dynamics?
The RoboSig FX trading strategy is a large piece of AI-calibrated custom-developed software that makes thousands of decisions autonomously using reliable price data. Our software is not high-frequency trading, but rather trades about 10 times per day with the average suggested position lasting about a week. Our system adjusts itself based on previous modifications (position changes, size changes, etc.). The next evolution will be for our AI to tailor its own parameters and “learn” autonomously via inline Machine Learning. Even higher consistency and Sharpe Ratio is the goal for when our ML strategy is integrated into the real-time decision stream to further improve our consistency and returns.
What would you like to advise the young generation of entrepreneurs who are looking to enter the software solutions space?
I think being an entrepreneur in any space is a roller coaster ride. You deal with anything from feeling the positive energy of possibility while battling towards the distant horizon that only you can see, to dealing with setbacks and negativity from people or situations around you, to listening to your doubts and fears whispering in your ear, to sleepless nights worrying about what you would do if you couldn’t do this, to suddenly being back on track and feeling great about everything, to watching miracles unfold around you that allow you to suddenly leapfrog obstacles and be closer to achieving your goals. The real entrepreneurs are the ones that keep going through all the inevitable pain, just for the promise of maybe seeing the light at the end of the tunnel and living life on your terms. Keeping your positive energy, no matter what, is a prerequisite to finally achieving what you consider to be a success.
How did you cope up with the pandemic situation and what measures were followed to continue your streamlined services?
When Covid-19 shut the world down in March 2020, it was a dramatic and scary time for RoboSig. At that point, we were working hard to grow our business and had a very large and successful fiduciary client who was using our software with grand success. They had also just launched a UCITS fund in Europe dedicated to the RoboSig FX strategy.
At RoboSig, we were about to finalize a few additional similar partnerships. We were generating the revenue we needed, and the future looked very promising. Then, the world changed. Our large fiduciary client with over $250M allocated to the RoboSig strategy was greatly affected by the global markets. While it was not related to how the RoboSig FX strategy performed, they were forced to shut down parts of their business and the RoboSig partnership was collateral damage. The other deals we were working on closing also collapsed since everybody wanted to wait and see what the world would end up looking like after all the lockdowns. RoboSig was lucky to have enough cash to survive for a while, as well as a loyal team that made the necessary sacrifices to further stretch what resources we had. The next step was to raise some funds in a post-Covid world after losing our largest client. It was quite an adventure that spanned over a year, but we did eventually successfully execute our plans. Throughout this whole time, our smaller LIVE clients continued trading and generating the consistent returns expected of the RoboSig trading strategy.
What does the future hold for RoboSig? Is there anything specific that the firm wants to obtain?
We are now looking to 2022. Thanks to our product continuing to do what it was designed to do, our comeback is complete and we are looking forward to working very hard to continue our growth evolution. Our goals are typical of any business: more fiduciary clients allocating a larger amount of their funds onto the RoboSig trading strategy. Our Cash Management Alternative track has also attracted a lot of interest due to its low risk profile and consistent returns that far exceed global interest rates. We will be working hard to grow that side of the business.
Please give us some highlights of your achievements, awards, and recognitions.
RoboSig has been featured on AMC Network’s NewsWatch TV show as well as chosen as one of the Top 20 Most Promising Capital Market Technology Solution Providers of 2021 by CIOReview Magazine.
What are RoboSig’s future endeavors and how is it embracing the Autonomous and AI World?
One of our more exciting recent developments is that we are currently forming a minority-owned subsidiary in the UK dedicated to the RoboSig strategies called RoboSig International, LTD. The team in London that we are partnering with is world class. Having an asset manager like this makes it easier for any type of investor to allocate cash onto the RoboSig platform. In addition, we are continuing to make significant R&D investments to continually improve our product.