A Japanese multinational is making a nine-figure bet on a six-year-old Korean quant shop that specializes in artificial intelligence and powers U.S. ETFs. The quantitative investing firm also has a new chief for its business on this side of the Pacific. Watch for a U.S. expansion next
| Robert "Rob" Nestor|
Qraft Technologies, Inc.
Yesterday, Kentaro Matsui
, managing partner at SoftBank Group Corp.'s
SB Investment Advisers, and Marcus Kim
, CEO of Qraft Technologies, Inc.
that SoftBank is investing $146 million in Qraft. As part of the deal, the Qraft folks will team up with Softbank on building "AI-enabled public portfolio management systems for SoftBank." And the folks at Seoul-based Qraft will also continue building out their presence in China and the U.S.; they revealed expansion plans in Hong Kong, New York, and San Francisco.
News of the SoftBank deal comes as Rob Nestor
, who joined
Qraft part-time last October as a global senior advisor, steps up as the firm's new U.S. CEO. In the U.S., Qraft already sponsors a quartet of actively managed funds, the Qraft AI ETFs
, with private label "ETF-in-a-box" shop Exchange Traded Concepts (ETC
) as the funds' investment advisor.
"Qraft can revolutionize the way financial institutions manage public equity assets, by providing their own AI technologies that have been tested and proven in the US equity market," Matsui states, citing SoftBank's support for Qraft's "mission of disrupting the asset management industry globally."
"There will be enormous synergy to be had with SoftBank, the leader in investing in disruptive startups, and public equities management powered by Qraft's AI," Kim states. "This only marks the start of AI technology fundamentally changing the US $100 trillion asset management industry."
Nestor, for his part, lauds Qraft's AI technology as "second to none in investment management."
"It is ripe for disruption with AI's rapidly evolving capabilities," Nestor states. "SoftBank recognizes this with its investment, and together we plan to change asset management."
Nestor, an adjunct professor at Drexel University's LeBow College of Business, previously led
Rafferty's Direxion, a U.S. mutual fund and ETF shop, before leaving last spring. Before that, he spent more than a decade with iShares, rising to managing director and of iShares smart beta at BlackRock. Earlier, he spent a decade with Vanguard, eventually servnig as principal of business strategy for institutional asset management. He is an alumnus of LeBow and of the University of Delaware's Alfred Lerner College of Business.
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