|Value proposition:||Provider of B2B and B2C investment platforms|
|The executive team:||Lennart Asshoff, Founder and CEO
Antonio Melé, CTO
Nikolai Hack, COO
Melanie Palmer, CMO
Nucoro is a technology firm that provides Wealth Management as a Service for B2B markets in the UK and CE, enabling large institutions serving mass-affluent clients to offer next-generation investment solutions. The company is backed by the renowned Rothschild banking family and quantitative investment manager ETS. Exo Investing their B2C platform, which is powered by Nucoro’s technology, was launched in April 2018. Exo uses the Nucoro Wealth Engine to provide a fully digital, private-banking grade wealth management solution to retail investors, at a low, fixed cost.
Lennart Asshoff, founder and CEO of Nucoro, started his career at ETS Asset Management in Madrid, which advises around $16 billion in assets. Lennart worked in the product development department and helped build unique, tailor-made quantitative investment solutions for large institutions and high-net-worth individuals. Nucoro’s technology was designed by a close group of people for their families and friends to help them control their investments. Soon, they decided to pitch their solution to the market and partnered with financial institutions across Europe to quickly expand through different markets.
“Three years ago, I started in the attic of my old employer’s office, they have a campus here in Madrid. I sat there alone with my laptop and started working on this proposotion. Then we applied for our FCA license and started to build up the team bit by bit, from one person to thirty-five in just three years.”
In this article, we’ll cover what makes Nucoro different, what they operate with backstage, and their challenges, routines, and plans.
Features worth special attention
Nucoro initially built Exo Investing for the UK market. These unique platform characteristics contributed to its quick market expansion:
- The platform was built from scratch, so no technology debt or reengineering was needed. Starting in 2016, they took the best engineering practices to build their Wealth Engine. It accumulated the experience of the other market players and is now non-dependent from third-party providers.
- Heavy customization powers enable you to control what you invest in, choose socially responsible assets, and create complex structure portfolios.
- The system involves a unique and self-adjustable machine learning algorithm for risk management, which takes into account investment date, risk level and market fluctuations. The system rebalances every single portfolio every single day.
“A person who starts [investing] at the beginning of March of 2009, for example, has not been affected by the drawdown, [whereas] the person that started in 2007 has a huge drawdown. You can’t treat these two portfolios in the same way and you shouldn’t […].”
- The completely automated system can handle millions of accounts and scale dynamically.
Exo app. Source: exoinvesting.com
Nucoro is focused on partnerships with large financial advisory institutions with mass-affluent clientele. Lennart describes it as an omnibus infrastructure that manages account segregation:
“[Exo’s clients] have a liquid wealth of between £100K to, let’s say, 1 or 2 million. They can’t get into a private bank but still don’t want the same service as everybody else. The Exo platform gives them a lot more choice on how to structure their investments, but of course, this makes the platform more complex. A person that is completely new to investing might not be attracted to this solution, which comes with a 5K minimum.”
Individual portfolio automation
Building individual portfolios is quite a complex problem, so normally, a human needs to do it rather than a machine. Nucoro automated this process by implementing complex algorithms, taking into account a lot of different characteristics and parameters to deliver a sensible output.
Nucoro built the algorithm in partnership with Lennart’s previous employer, ETS, where it has been housed for the last thirty years:
“It’s not something that we’ve quickly made up in a garage. It’s something that has been tested and tried out before.”
At the core of it, they use dimension reduction in a multidimensional state. The algorithm takes into account the evolution of the portfolio, how much money you actually invest, your investment time horizon, and many other parameters to build a unique portfolio for each client. So, daily inputs constantly improve and optimize the algorithm as they’re categorized by the machine learning algorithm.
Exo dashboard. Source: exoinvesting.com
An automated risk strategy algorithm is a good example of innovation in the wealth management space. As for Lennart, it’s extremely important to keep telling everybody to innovate because otherwise, they will get left behind. He says that it requires a lot of education and persistence.
Right now, there are thirty-five employees working for Nucoro. A portion live and work in Madrid. The team based there is completely tech- and product-focused. In addition, they have a main office in London comprising compliance, legal, marketing, operations, and sales. In addition, they have offices in Geneva and Luxembourg.
Nucoro uses the Python framework, Django. The CTO of Exo, Antonio Melé, is the author of “Django 2 by Example,” a book on how to build powerful, reliable Python web applications from scratch. The solution is cloud-based and hosted on Amazon. For their clients, Nucoro’s Wealth Engine builds and provides virtual private clouds to restrict them from GDPR issues. Initially, Nucoro used Angular for front-end, but as soon as Google stopped supporting both Angular 1 and Angular 2, they switched to Vue. Nucoro has tribes for different technologies, so front-end, back-end, and the tech lead for each are involved in the planning. Their development team is split into two sub-teams, each with their own product manager and Scrum Master.
Nucoro constantly improves its products. Since helping launch a B2C product, they get a lot of feedback from customers and they build that into their white label and API product feedback loop. They’ve changed a lot of things over the years—from the risk questionnaire to the simulation modules and the actual trading implementation.
“We implement it in the UK, we see how people use it, we ask our users what they think about the process, and then we use that information to adapt our platform so that we are constantly improving.”
Among the problems they face, there’s the need for integrations. Because it was developed from scratch, Nucoro still struggles to deal with third-party providers’ technology debt when integrating their services. However, Lennart is optimistic about adding more integrations and building their own APIs.
Nucoro are transforming the ways in which Europe is investing. This requires massive persistence. In that regard, I’m eye-to-eye with Lennart; hard workers create success that’s difficult to shake.