Former UBS executives launch systematic solutions firm

Two former UBS executives specialising in systematic and rules-based investing, Steven Bates and John Bennett, have reunited to launch Future Index Partners Ltd, a new research firm developing diversifying investment strategies.

The company’s focus will be on research and developing innovative investment strategies - Steven Bates

The company has signed a non-disclosure agreement (NDA) with an undisclosed major index provider to act as calculating agent for a series of replicable indices aimed at product manufacturers, including ETFs, structured products and actively managed certificates (AMCs).

Research and innovation

Bates said the firm’s mission is to remain focused on research and innovation rather than competing directly with established index providers or asset managers.

“The company’s focus will be on research and developing innovative investment strategies,” Bates (pictured) explained. “We’re not trying to be another index provider or asset manager. That market is already saturated. We’ve done work as index calculation agents in the past, but the infrastructure is costly and complex.”

To maintain scalability and robustness, Future Index Partners will partner with established providers rather than building infrastructure in-house.

“Our mindset is scientific: we want to offer flexible solutions that deliver real value to end clients, whether institutional, high-net-worth or retail,” Bates said. “On fees, we aim to sit firmly in the middle - higher than broad-market passive products but below hedge funds - offering demonstrable value.”

Our company provides solutions that give peace of mind through disciplined, transparent diversification - John Bennett

Bennett added that the firm’s approach is designed to give investors confidence through transparent, disciplined diversification.

“We don’t want to be calculation agents or asset managers; we focus on owning the methodology and rules, partnering with regulated institutions and other capable entities to publish the indices,” he said.

Global opportunity

The founders see a clear opportunity as investors look for diversifying alternatives amid high cash balances and growing concentration risk.

“Many portfolios are sitting on large cash holdings, and we see an opportunity to provide alternatives that improve diversification and risk/return profiles,” Bates said. “Our strategies are flexible, designed to suit a range of clients including retail, high-net-worth individuals and institutions. They can be wrapped in ETFs, structured products or AMCs depending on what fits the client and market.”

Future Index Partners plans to target wealth managers, advisers and product providers across the UK, Switzerland, Europe and, eventually, the US, tailoring its strategies to local demand and regulatory requirements.

Bennett (right) noted that concentration risk remains a key concern for investors globally.

“Concentration risk is a growing concern for investors, whether in currencies, sectors or single stocks,” he said. “The US active ETF market is particularly dynamic and growing, but Europe, the UK and Switzerland are also key targets. Investors are increasingly worried about concentration risk, and our solutions provide disciplined diversification regardless of market cycles.”

Customisation, Bennett added, sits at the heart of the firm’s model.

“Working with asset managers allows us to deliver proprietary indices without taking on the operational burden ourselves,” he said. “Together, we see ourselves as the intellectual property provider partnering with others for calculation, publication and distribution, while staying focused on innovation and client needs.”

Beyond traditional diversification

Bates said the firm’s investment methodology aims to go beyond traditional diversification tools.

“Rebalancing portfolios during market corrections is something investors often fail to do,” he explained. “Traditional diversification has relied heavily on hedge funds, private equity and other alternatives, but these are often illiquid and expensive. We’re looking for better diversifiers moving beyond what’s commonly called smart beta, by adopting broad single-asset and multi-asset approaches.”

The firm’s proprietary approach allows assets to “compete” based on relative momentum and risk factors, creating exposures that can potentially outperform the market with similar or lower risk.

“The goal is to translate these strategies into indices that partners can use to build ETFs, structured products, AMCs or other vehicles grounded in quantitative investment strategies,” Bates said.

Future Index Partners will design indices to client specifications rather than offering generic, off-the-shelf products.

“We work with wealth managers, institutions and asset managers to create exclusive, transparent solutions based on their benchmark, universe and risk constraints,” Bates explained. “Transparency and client control are key especially when working with asset managers, so that solutions remain fully aligned with client objectives while maintaining flexibility for different market entry points.”

Bennett emphasised that clarity and collaboration will underpin the company’s approach.

“Our indices are built with clear rules and specific objectives for particular clients, differentiating them from generic indices,” he said. “Transparency, clarity and collaboration are central to our approach. We position ourselves as specialists in designing unique index methodologies, working closely with clients and asset managers to meet their format, risk and regulatory requirements.”

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