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Funded algorithms, royalties and returns

270K in royalties were paid over a recent 9 month period. Extrapolating this it is $360 K per year
which means a profit of $3.6 million. There is an investment of $155 million in the funded algorithms
which means a return of little over 2%.

Also $30K royalties per month for 25 authors averages to little over $1K per month per author.

Do I have this approximately right?

2 responses

The math looks right to me. Quantopian is going the worldquant way. Forget serious money here. It is only a hobby for students etc.

While the numbers above are representative, don’t extrapolate too much from them. The quantity of funded algos wasn’t constant throughout the reporting time. Additionally, Quantopian was transitioning our investment strategy to use a “signal combination” approach, and these numbers may not be representative of the future returns.

Quantopian creates a royalty pool that is equal to 10% of the net profits of our investment strategy. Individual authors are compensated based upon the weight of their algo in the fund. Some authors may receive substantially more if their algo gets a higher allocation, or less when its allocation is smaller. This weighting is dynamically adjusted so an author’s algo and associated compensation may change over time. Take a look at the Get Funded page for more specifics.

A big part of Quantopian’s vision is to ‘democratize’ quantitative investing. The current authors represent a varied cross-section of geographies from around the world from a rich set of backgrounds. There isn’t one ‘typical’ author. It’s not dominated by any specific ‘group’ like students or hobbyists. They do however all share drive, innovation, and an excitement for quantitative finance.

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