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19 How to Take the Emotions out of Investment Decision Making with Roman Lutz of Future Value Capital – 1of2

Roman Lutz of Future Venture Capital on Top Traders Unplugged with Niels Kaastrup-Larsen

“In 2008, during the financial crisis, I realized that the hedge fund industry had a significant problem. The problem was, and still is, many hedge funds don’t deliver what the client expects them to deliver.” – Roman Lutz (Tweet)

Can you implement well established hedge fund strategies in a systematic way?

Future Value Capital has been researching this for years, before they started trading. They are unique because of  how they simplify and automate complex Risk Premia.

But we aren’t the best at explaining their systems. Roman Lutz, the Chief Financial Officer of Future Value Capital will explain it all in the interview.

Thank you for downloading the nineteenth episode of Top Traders Unplugged.

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In This Episode, You’ll Learn:

  • About Merger Arbitrage and How investors can Profit
  • What criteria they look for in mergers, such as Market Cap, Deal Size, Liquidity etc.
  • What currency markets Future Value Capital enters
  • The app. 15 strategies they use and how many sub strategies they may have

“The whole CTA space embraces the concept of uncorrelated returns and liquid investments quite well. Then I thought, ‘it’s probably interesting to develop other alternative investment strategies besides trend following in a systematic way.’ Then I basically discovered this whole world of alternative risk premiums.” – Roman Lutz (Tweet)

  • The origin stories of where the Future Value Capital strategy derived from.
  • Understanding the typical way to build a derivative business
  • Why the average correlation of a hedge fund with equities has shifted from 0.6 to 0.9 from the 1990’s to today.
  • How Scottish Whiskey tasting can kickstart long term business relationships

“We just want to deliver clients what they expect from an alternative investment. That’s what our passion is.” – Roman Lutz (Tweet)

  • The power of systematic trading:
  1. Taking the emotions out of investment decision making
  2. The power to trade a large number of different markets
  3. The capacity to test your systems for past market conditions
  • Addressing the “Black Box” label that many systematic programs has
  • What environment Future Value Capital’s systems are best suited to operate within
  • The business structure of Future Venture Capital and the alliance with Trium Capital

“One thing which is very powerful about investments into systematic systems is it takes emotions out of the investment process. I think this is very important..” – Roman Lutz (Tweet)

  • About the post Madoff and additional regulatory environment investors are operating in
  • How Roman Lutz developed the shared business management and split the overhead cost with other emerging fund managers
  • The negative side effects of sharing hedge fund management business practices with other firms
  • A ballpark figure for the cost of being part of the Trium Manager Alliance and get the services required to be able to operate as a regulated and well run firm

“We think implied volatilities are actually a very bad indicator for future realized volatilizes. But what it a much better predictor is realized intra-day volatility.” – Roman Lutz (Tweet)

  • How Roman and partners develop new plans in regards to where the economy is going and how to develop plans to manage funds going forward
  • How merger arbitrage and volatility arbitrage connect implied and realized volatility
  • How to buy realized volatility
  • When to deploy and when not to deploy the realized volatility trades (when volatility starts to trend)
  • Main categories from a strategy point of view – Trend Following for example
  • How Future Value Capital uses trend following
  • Plus much, much more…

Resources & Links Mentioned in this Episode:

Listen to the past episode with Marty Bergen from Dunn Capital mentioned in regards to the higher correlation between traditional alternative investment space and the traditional assets.

Lars Jaeger owner of Alternative Beta Partners – Wrote extensively about the lack of alpha to people hunting it. 4x more assets are looking for alpha than alpha is available in the market.

Listen to our previous guest Karsten Schroeder from Amplitude Capital on the value of systematic trading vs. discretionary

Learn more about the determining implied market volatility with VIX

Sponsored by Swiss Financial Services and Saxo Bank:

Saxo Bank Sponsor of Top Traders Unplugged

Connect with Future Value Capital:

Visit the Website:

Call Futre Value Capital: +44 203 008 7292

E-Mail Future Value Capital:

Follow Roman Lutz on Linkedin

“We build systematic trading strategies which basically do what hedge fund managers do in a discretionary way.” – Roman Lutz (Tweet)