Investment

An investment app, payday loans, anamorphic art…and why this all might interest family offices

Fintech developer Vesti.ai wants to raise seed capital from family offices for an app offering investors an analysis of their portfolios such as ESG impacts and risk factors.

Chief executive Deborah Yang points out companies like Robinhood and eToro have revolutionised trading: “Broker commissions are suddenly outdated. Fractional share trading is the new normal.”

Hurwitz is fascinated by how algorithms have developed the capacity to disrupt key sectors dominated by entrenched oligopolies

Young investors are bereft of analysis and governance, she says. They are bamboozled by finance-speak. Vesti wants to change all this via real-time access to portfolio data processed through an algorithm. Voice recognition is part of the service. 

The app is free to download. Vesti wants the system to be funded by data providers and advertisers through a central marketplace that facilitates trading.

Jonty Hurwitz, Vesti chairman, says: “Younger generations are completely changing the way they think about things after inheriting, and generating, wealth.”

He says the idea appeals to family offices because Vesti can inform, and entertain, their next generation on investment affairs.  

Hurwitz says financial advisers can retain a role: “We’re happy to work with them.” But he said it was time for big providers to share their data and technology tools. 

He compares the situation to the days when record companies dictated tastes, and profits, through the sale of CDs. This was upended by streaming, now led by Spotify. “We still see information asymmetry in financial services,” says Hurwitz. “But it’s wobbling.”

He said US stock and ETF feeds have been uploaded by Vesti, with Europe soon to follow. Vesti uses simplicity and humour to make key points, far removed from financial jargon, using features, like card images, harking back to Instagram. 

Instead of fundamental research Vesti talks in simple terms of the ways companies are nourished. 

Providers will supply data feeds through Vesti’s marketplace. Themes covered by Vesti currently incorporate trending stocks, cryptocurrencies, cannabis stocks and clean energy. The site is continuing to evolve.

Yang used to work for index provider MSCI, where she was latterly global head of its ESG business. Vesti aims to drill deeply into ESG trends, including corporate carbon footprints, armament exposures and female representation in the boardroom. 

A recent survey by Boring Money and Montfort Communications found that ESG influenced 78% of respondents aged 18-34 Financial advisers were the top ESG adviser for 36% of them. Advice from friends and family came top for 38%. Surprisingly, YouTube was top ESG provider for 37%, with Twitter rated by 23%. 

Jonty Hurwitz is a polymath. The son of a South African hotelier, he studied electrical engineering, then travelled to India, and got involved in yoga.

His career kickstarted in the mid-1990s, where he started to research data for Gilbert de Botton, chairman of GAM, an adviser to wealthy investors and family offices renowned for his exceptional asset managers and exceptional fee scales.  

Hurwitz built spreadsheets groaning with data. He says: “I was interested in big data, before it got called that. I liked to work out different ways to see things.” His team at Vesti includes several former colleagues from GAM.

Hurwitz left to develop reporting systems for asset managers at a company called Delve. He backed a company called Duedil which scoured the internet to provide a breakdown of private company finances for intermediaries.

Encouraged by de Botton, Hurwitz developed a career in sculpture, specialising in anamorphic art which can be viewed in different ways from different directions. In 2014, he collaborated with a team of twenty to create a nano sculpture, the smallest in the world, invisible to the human eye. 

Hurwitz is fascinated by how algorithms have developed the capacity to disrupt key sectors dominated by entrenched oligopolies.

In 2007, Hurwitz took on loan providers by becoming co-founder and chief technology officer of Wonga which offered weekly, or monthly, loans to consumers to tide them over until payday.

Algorithms designed by Hurwitz were at the heart of the systems. They dug deep to analyse the credit history of individuals to see whether they could be trusted.

No one had a problem with the algorithm. But Wonga, like the rest of the payday sector, had to charge high interest rates to service small loans which looked exorbitant when expressed over a year. 

Wonga was criticised for its loans, and operational shortcomings and the Financial Conduct Authority ultimately imposed a price cap on payday loans. 

Wonga collapsed in 2018. Provident Financial decided to cease doorstep lending this May. Amigo Loans, another subprime lender, has suffered on the back of criticism by the regulator.

The affair saddens Hurwitz who argues Wonga was offering a service which the banks were failing to offer. 

“Wonga made huge mistakes along the way and I take my share of the blame. But I didn’t agree with the directions it ended up taking. That’s why I left in 2013. If there’s one thing I have learned from Wonga, it’s humility.”

He believes Vesti’s data will counter short-termism by supplying investors with information so they think twice, rather than trading in a hurry. 

Vesti believes family office beneficiaries can share investment ideas and portfolio characteristics. 

Hurwitz says: “The beautiful thing about this is about democratisation. There isn’t a massive difference in needs between a young professional who has $5,000 to invest and another who has inherited large sums of money.  They all want to know their impact on the planet. They want to understand whether their portfolio aligns with their value systems.”

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