Tommaso Migliore: European Leader in the Development of AI-driven Investment Strategies

MDOTM is the European leader in the development of AI-driven investment strategies. With over 50 people involved through our R&D and LAB, we have one of Europe’s biggest AI-focused investment teams that provides institutional investors with Portfolio Advisory and Asset Allocation services for over €750 million in Assets under Advisory.

We believe that by combining the scientific method with Artificial Intelligence, it is possible to support and better inform investment decisions through an unbiased and holistic view of financial markets. We achieve that with our proprietary investment methodology called ALICE® (Adaptive Learning in Complex Environments) that our clients leverage to enhance their investment processes, improve their Asset Allocation, and launch new investment solutions.

Tell us about yourself?

Before founding MDOTM, I played ice hockey professionally for ten years and led the Italian National Team. I have always loved to compete. During that time, I obtained a master’s degree in Finance from UCSC Milan and studied at Stanford University.

I came up with the idea of MDOTM while I was attending a lecture on systematic investing. I have always been interested in financial markets, but I became fascinated by how applying the scientific method to investing could lead to better investment decisions.

That same evening, I called my best friend Federico Mazzorin – a physics student at the time – and we immediately started developing the first investment model to manage our savings. In late 2015, after approximately two years of positive results, we decided to found MDOTM in London, and since then, we haven’t stopped growing.

What is the inspiration behind your business?

We believe that investing has become a tech challenge; the increasing complexity of financial markets requires investment solutions that can withstand complexity and adapt when markets change.

Given this challenge, we strive to build the best investment technology in the market. Over the last six years, we put all our efforts into making ALICE® – our proprietary investment methodology – the most reliable and explainable technology for investment decision-making.

Since we want to develop the best AI for investments, we mainly use our resources to enhance and constantly improve our technology. For example, we have a vertical focus on R&D where we invest close to 75% of our budget.

We also created the MDOTM LAB – the place where we collaborate with young talents and universities to develop state-of-the-art insights on finance and AI.

What is your magic sauce?

There is no ‘magic sauce’ behind building AI for investments. We were first-movers in the industry, giving us the edge to build a long and robust track record.

Throughout this experience, we developed a unique skill set to bridge the gap between data science, engineering, finance, physics and economics.

The only authentic magic sauce here is the relentless effort and experience throughout the years that have helped us create our proprietary AI model called ALICE® – which stands for ‘Adaptive Learning in Complex Environments’.

Where do you see your company going in 5 years time?

It is hard to tell exactly where we will be in five years. After the recent closing of a Series-B round led by institutional and professional investors that brought our total funding close to $10M, our investments are directed to scale up and expand our operations across Benelux, the Nordics, Switzerland, the UK and the US, where we plan to open a NY office by the end of the year.

What has been your biggest setback so far?

The pandemic was a ‘black swan’ event that temporarily slowed down our growth path. From an operational point of view, we were prepared for some of the pandemic’s challenges.

As a startup, we were used to being flexible and working remotely. However, on the business side, we experienced a drop in new business opportunities. The probability of closing new deals (which is incredibly important for a fast-growing startup) dropped significantly given the pandemic’s uncertainty, and the onboarding times doubled.

Yet – thanks to our business model based on long term partnerships – cash flows remained stable due to prior closed deals. Our partners’ confidence in our ability to perform enabled us to continue investing in innovation and future projects. I believe all of these components were crucial to successfully navigate through the pandemic.

What is the next big challenge for your business?

MDOTM’s ‘next big challenge’ is the challenge it has had from day 1: to keep innovating and challenging the status quo.

We are currently in a scale-up process that will expand our company in numerous ways, such as increasing our products, our client base and attracting more experts to our team.

Our mindset makes us constantly improve, so we want to keep this innovative mentality while scaling up, which also represents our company culture. So our challenge here is to keep innovating without changing our main focus and core values.

How do people get involved/buy into your vision?

As AI proves to be a mature technology, it is rapidly becoming largely adopted across asset and wealth management to support investment decisions.

In an industry where data science and statistics have increased for decades, AI represents the natural evolution towards more elastic and adaptive investment decisions.

So instead of just ‘buy into our vision’, our clients recognise the value add that AI-driven views deliver to their investment process in terms of improved efficiency and reliability of investment results.

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