Alternative Investment Awards 2017 13 Company: Tmesis Capital Management Contact: Jason Huang Email: [email protected] Phone: (+886) 975-021-990 Website: AI170029 Tmesis Capital Management is a Taiwanese hedge fund manager. We profile the firm to find out more about the services it offers. With its flagship quant fund launched 2016, Tmesis applies fully automatic trading strategies that avoid the negative effects of human involvement. The firm generates trading decisions using high-level mathematical, economic, and statistical models, many of which rely on artificial intelligence. Current applications of machine learning in the field of artificial intelli- gence allow the fund to deal with big data that contains patterns and logical sequences not yet noticed by humans. This gives Tmesis an edge that allows it to profit in a variety of market conditions while sup- porting its core mission of providing ongoing returns to investors. To achieve excellence, the firm draws on heavily on the experience of its 3 founders, who graduated from the University of Washington in Seattle. In addition, their 10 other team members all hail from top universities in Taiwan, where they earned degrees in finance, math, and engineer- ing-related majors. In less than a year, Tmesis’ staff has expanded from 3 to 13 to now offer the benefits of masters, PhDs, experienced finan- cial analysts, data scientists, and computer engineers, making good on Tmesis’ promise to bring brilliant minds together to serve investors. Fundamentally, to Tmesis, the era of human traders has ended: now is the era of artificial intelligence. When AlphaGo defeated Sedol Lee, a world-class professional go player, in March 2016, it marked the end of an era: Artificial intelligence was now a better decision maker than a human. Every purchase and sale of a financial instrument involves a decision-making process just as might be seen in a game of go, but fi- nancial decision are infinitely more serious. Accordingly, Tmesis shields funds from the risk of reckless human decisions as much as possible by relying on cutting-edge quant and AI technology. In making decisions, humans draw on their past experiences, then include the outcome of that decision as an experience informing future decisions. But a human’s experience is always limited, often severely so, and this can lead to bias or to decisions that are based on less than a comprehensive understanding. Even more concerning, the quality of any decision can fall prey to the whims of emotion or environment, among many other internal or external factors. When AI makes decisions, however, it uses information mined from with- in big data, with predictions made by a neural network that never stops learning. What’s more, optimizations and decisions based on the predic- tion are made by genetic algorithms and reinforcement learning. When using mature deep learning technology to analyze big data, AI makes more comprehensive and better decisions than humans do. Addtionally, its high level of computing power allows it to make quicker decisions, not to mention that it does not have to rest and is not affected by emotions. No human trader could process financial data that changes with each second, such as global economic data, corporate financial reports, or prices—and that’s not even taking into consideration the huge amount of historical data already available, let alone the entanglement of all these factors, with bits and bytes intertwined and mutually affecting one another. When a trader makes a decision—which is already, by its na- ture, biased—under these conditions, in so high-stress an environment, that affects the quality of the decision made. Tmesis, by contrast, looks to mature deep learning algorithms, high-quality data, and significant computing power for its decisions. Overall, investment means looking at the future, not just the past. Humans were once the world’s best decision makers, but no longer. It is hard to see how traders can compete with AI even now, and all the more so as the technology advances. Indeed, Tmesis’ algorithms evolve daily, and its performance with them. Rather than stubbornly sticking with antiquated and inferior methods, investors can embrace the tech- nological progress that holds the key to the future. Investment, Tmesis believes, is not a stubborn monster: it is an elegant solution. Best Hedge Fund Management Firm 2017 - Asia & Best Multi-Dimension Quantitative Fund (Since Inception): Tmesis Capital Management