NY Office

110 E 25th Street
New York, NY 10010
1.914.393.7555
The intersection of active and passive®

Systematic bottoms-up stock selection

Active management is at an inflection point

While passive management simplifies many aspects of investing, alpha generation through active management is an imperative for investors trying to meet their future obligations. After a market cycle of disappointment from active management, the question for these investors is how to capture alpha in a better way.

At Epsilon, we deliver bottoms-up stock-selection alpha through a systematic process. We create investment strategies from big data signals generated by the entire active management community. We believe this approach is uniquely suited to solve the active/passive dilemma. It provides active risk with consistency in mind. It is structurally advantaged to deliver lower fees, full transparency, and daily liquidity. It attempts to harness the best of active and passive.

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Our Objectives

Short-term performance is at the mercy of randomness. Long-term results comes from process orientation and a disciplined adherence to your circle of competence:

Growing Your Capital

We use rules-based approaches to avoid behavioral biases.

“The first principle is that you must not fool yourself and you are the easiest person to fool.” – Richard Feynman

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A Truly Client-First Approach

Through transparency, liquidity, and low fees, we commit to true alignment of interest.

“We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.” – Jeff Bezos

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Reducing the Randomness of Outcomes

We apply the scientific method to the investment process to deliver investment consistency.

“The plural of anecdote is not data.” – Marc Bekoff

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The Epsilon Flywheel

So how do we deliver passive liquidity, transaprency, and fees with active alpha? By removing the expensive pursuit of fundamental security analysis. We make security selection decisions through big data analysis of regulatory filings. We tap into the collective wisdom of all active managers to distill their cumulative fundamental research. This provides tremendous cost advantages for our products, which we can pass on to our investors. Our focus is centered on portfolio construction and process improvement, the key ingredients in delivering consistent alpha.

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News & Insights

Markets function as a medium for the weighing of intrinsic value is facilitated by their profiting on arbitrage. Recently, that arbitrage has grown shaky, leading to disruption of an orderly market function. How can investors combat this dislocation?
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We’re not in the business of extrapolating cycles. But we are students of cyclical phenomenon. Mean reversion is by our estimation, the most powerful force in investing. When combined with human behavior, it drives the yawning gap between long-term average returns and middling average-investor outcomes.
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