Faced with the rise of crypto currencies, the Napoleon Group, which specializes in quantitative finance and blockchain, is positioning itself as a major player. It's objective? To offer its clients investment strategies in crypto-assets based on quantitative algorithms. In this article, Napoleon Group’s two founders, Jean-Charles Dudek and Arnaud Dartois, discuss the challenges of this new market and its prospects.
How would you present the activity of Napoleon Group?
Napoleon Group is a specialist in crypto-asset investment solutions. Currently, our group comprises two distinct entities:
- Napoleon Asset Management: a management company offering products exposed to the performance of crypto-assets regulated by the AMF and aimed at a professional and institutional audience ;
- Napoleon Software: trading software specialized in crypto-asset management for retail clients.
Our expertise lies in performance generation and quantitative management of these digital assets.
You talk about quantitative and algorithmic management of crypto-assets, could you explain in more detail how you put new technologies at the service of asset management?
Nowadays, the amplitude of the emergence of data is such that the development of algorithms capable of processing these data is mandatory for the extraction of pertinent trading signals for our clients. In order to create these algorithms, our management and research teams cooperate closely with our IT teams. The former work on efficient and innovative investment solutions. If their research is deemed relevant by our committees, it is then put into production by the IT teams who in turn code the algorithms.
The crypto asset market is emerging as a class of its own, what are its advantages over other assets?
Indeed, crypto-assets are a new emerging asset class, and we immediately sensed their potential. They are extremely disruptive assets that are truly revolutionizing the financial and administrative sphere. Crypto-assets are now seen as a financial asset that can be inserted into an investment portfolio with its own characteristics.
The crypto sphere is enjoying an upward expansion and allows for a real diversification of the client portfolio. In fact, it has the advantage of being decorrelated from other asset classes and is, therefore, less affected by major economic cycles. Intrinsically, the distribution structure of monthly rolling returns of crypto-assets is also largely skewed towards positive monthly returns. Statistically, the customer has access to upside expansiveness through crypto assets and without suffering the passage of time.
Some people blame the crypto-currency market for its volatility, how do you respond to this resistance?
Crypto-assets are extremely risky, but contrary to popular belief, this is rather an advantage! Indeed, it is always possible to dilute a highly concentrated risk, when it is complicated to do the opposite.
Napoleon Group’s expertise lies in its ability to manage this high concentration of risk to suit the client’s desired risk/return profile. Thus, we propose several types of strategies or portfolio allocations to our clients, depending on the level of risk they are willing to take and their objectives.
Finally, when we study crypto-assets, we realize that volatility shocks occur most often on the upside. This is also why the volatility of crypto-assets is precisely an asset because it makes them a very moving commodity that offers a whole new range of possibilities for our algorithms.
You have just launched a new product: the “Crypto Army”, could you tell us more?
Yes, in response to strong customer demand, we launched our “Crypto Army” platform ten days ago. This interface provides access to the best cryptocurrency indices on the market, classified according to specific themes and value units. It is a very efficient tool and a real time saver for the client, as it allows them to analyse the crypto-asset market and obtain the information he wants quickly.
After the infrastructure blockchains such as Bitcoin and Ethereum, more sophisticated and high-potential upper-layer technologies are beginning to emerge. Thematic indices allow for easy exposure to these projects. We are very proud of this innovation, as we believe in the emergence of crypto indices!
What are the challenges facing your company today, and what are your prospects for the future?
We want to position ourselves in the minds of investors as specialists in crypto-asset investment and solutions tailored to their needs.
We are currently on a hyper-growth path, and we are recruiting heavily to strengthen the sales, marketing, and communication teams. In addition, we are very active on the international market as we want to establish ourselves firmly on the European market and, soon, on the Asian market.