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David Jiang rides the crowd back to asset management

The former BNY Mellon I.M. and PineBridge exec is bringing crowdsourcing to portfolio ideas for institutions.

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David Jiang, an experienced executive in asset management in both Asia and the U.S., is behind a startup, Ginger Analytics, which seeks to use digital tokens to upend how asset managers and asset owners source investment ideas.

“Ginger’s investment thesis is that crowdsourced information is more accurate and timely than information analyzed in any centralized investment firm,” Jiang told DigFin. “We’re going to prove it.”

He is not looking to disrupt active fund management companies (although Ginger would surely disrupt its analysts). He believes investment firms should continue to seek alpha and maintain an on-the-ground presence worldwide.

The platform he’s helping build at Ginger is meant to augment the pool of data points and investment ideas by using a blockchain-based platform to source them.

Crowdsourced information is more accurate and timely

- David Jiang, Ginger Analytics

Ginger will conduct an initial coin offering, in which its token, the Ginger Buck (that’s the working name for it) will serve as a utility coin enabling asset managers or asset owners to buy information on the Ginger network.

Asset management history
Ginger will charge them a subscription, or a tailored fee, for its ‘platform as a service’. But the ICO, slated for midyear, will seed the company’s blockchain with users, as well as serve as an investible asset. (ICOs gain in value if more people seek them as a means of buying a network’s services.)

Jiang is an asset-management veteran, not a millennial tech entrepreneur. He served as BNY Mellon Investment Management’s Asia Pacific CEO from 2003 to 2010, in Tokyo, Hong Kong and Shanghai. Then he moved to San Francisco with the firm to run its passive and beta business globally. In 2012, he joined AIG to restructure its in-house asset-management arm, which split off as PineBridge Investments, which he led as CEO in New York until 2015.

His partners include Khaled Moheydeen, an I.T. specialist and quant trader at BNY Mellon subsidiaries and GMO; and Vale Sundaravel, who brings experience in cloud access security, electronic signatures and mobile shopping. He is in talks to bring on board more partners, including a quant investor and an analyst.

(Jiang is also backing another tech venture, MirraViz, which is focused on outdoor advertizing and is unrelated to investments.)

Anyone with a mobile
Ginger will source contributors, whom Jiang defines as “anyone with a mobile”, who can get paid Ginger Bucks for posting any kind of data on the startup’s blockchain.

A contributor can post information or enter a prediction

- David Jiang, Ginger Analytics

This could range from raw data, such as copper prices, to metadata, such as lines of people waiting to buy the latest gadget; to actual investment thesis and buy or sell ideas.

Investment firms already pay their analysts or use expensive third-party researchers to dig up such information, which can be especially hard to find in emerging markets or in specialized, private situations. Ginger’s bet is that letting anyone in the world put their data or ideas on the blockchain – and get rewarded directly by institutional investors – will provide more choice and competitive edges to portfolio managers.

“It will all be tracked on a publicly trusted distributed ledger,” Jiang said. “A contributor can post information or enter a prediction.” Asset managers and asset owners (such as sovereign wealth funds) will pay more to those providing the most value. Remuneration will also be transparent to participants on the blockchain.

“This is about the sharing economy,” Jiang said. “Individuals can rent their time. If you take a picture of produce prices in a supermarket, that’s data, and you might be able to earn rewards. If you make a prediction, we’ll track it. Asset owners and asset managers will be able to see everything and build a portfolio based on these ideas,” either by giving in-house analysts more raw data or giving portfolio managers new ideas.

“At the corporate level, this could allow investment firms to offer global coverage in new, alternative products,” Jiang said.

Blockchain and the crowd
He says the idea for Ginger came from his traditional career in asset management. He says PineBridge’s spinout and subsequent growth in assets under management was due to traditional tactics: investment teams positioned around the world, focusing on emerging and private markets where outperformance could still be generated.

This is about the sharing economy

- David Jiang, Ginger Analytics

But if the concept of manager skill is still valid, Jiang says, the investments industry is inefficient. Crowdsourcing data and portfolio tips will allow fund houses to cut costs and offer better products, he says. Sovereign wealth funds can use the platform to find asset managers and gain insights into alternative asset classes.

Even asset consultants could use it for augmenting advice to their clients or track asset-manager performance. Wealth-management platforms (wholesale distributors of funds) could use it to build strategies for their wealthy customers.

Ultimately, the platform could securitize assets: by tokenizing assets, they can be fractionalized and sold or IPO’d directly to portfolio managers or asset owners on the platform, bringing liquidity to assets that until now remain private and untradeable.

To realize this vision, Ginger Analytics will first conduct its token sale this year, the precursor to launching the platform – both in terms of generating tokens for use on the network, as well as for drumming up publicity.

The broader possibilities – using Ginger as a distribution hub, or a securitization platform – would require changes to securities regulation or for Ginger to obtain advisory and brokerage licenses.

 

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David Jiang rides the crowd back to asset management