Skanestas Investments: Looking Forward with Key Milestones

Kirill Kuchinskiy, a Director, gives an in-depth look into Skanestas Investments.

With markets in upheaval, there has never been a greater need for conventional brokerage services and portfolio management. Given the rising cost of these services, Finance Magnates talked with Kirill Kuchinskiy, Director of Skanestas Investments, about the firm and its prospects.

Skanestas was founded as an EU-licensed company that was formed and continues to expand in accordance with EU regulations. Our vision of economic potential includes the opportunity to trade on the stock exchanges of the EU and the United States. Because we are situated in Cyprus, we have easy access to both.

Since its inception in 2013, the firm has developed fast, expanding from 4 to over 40 people at present.

When the corporation drew up new research and development strategies in 2020-21, it saw significant growth. It mostly impacted our information technology, research and development, and trade areas. Skanestas has evolved from a buy-side broker to an asset manager, exhibiting its capacity to adapt to market developments while sticking to its strategic intentions.

How has Skanestas Investments evolved through time to become the firm it is today？

I believe the two most crucial milestones must be the incorporation of the firm in June 2013 and the receipt of its license in October 2014. The firm was completely operating by January 2015. Moving on, the firm was able to display its first significant earnings in early 2016, due to a steady influx of clients.

Further expansion of the corporation implies the need to use its money. In January 2019, we got our license extended by adding “trading on own account.” In April 2019, I joined the Board of Directors while simultaneously serving as one of the company's executives directors. This was a watershed event for me, paving the door for a leadership transition.

Skanestas Investments assumed my sole ownership in October 2019. The company's strategy and objectives were redefined under my leadership, and the emphasis switched from order execution to asset management and structured solutions.

These products enabled the corporation to earn more cash.

Skanestas Investments joined the Cyprus Stock Exchange as a custodian, direct clearing member, and trading member in 2020. It was beneficial in designing infrastructure solutions.

Our team began working on incorporating algorithmic trading in 2021. An R&D department was established to develop trading algorithms, and an automated risk monitoring system was implemented.

We ended 2021 with a 48% profit in portfolio management, far outperforming the S& P 500 and Nasdaq in the same year.

We renewed our license and achieved General Operator status with the Cyprus Stock Exchange in 2022.

As of today, our R&D section is fully staffed, allowing us to increase prospective trading algorithms and enhance the quality of our research.

Can you describe the services provided by the company？

Skanestas Investment is, simply put, a standard financial firm. Our guiding idea is to serve our customers as we would want to be treated. Our primary areas of concentration are portfolio management services and structured client solutions. A typical brokerage is also an alternative, however, it is not the most important.

We adhere to the values of best execution, fairness, and openness while offering any of the aforementioned services. All disclosures are made to meet any client requirement.

The primary product for future growth is discretionary portfolio management.

The profit-sharing concept is used in portfolio management, where a scaled performance fee is imposed on profits, subject to a hurdle rate and a high watermark. Customers benefit from the high watermark concept, the lack of administration costs, and no intermediate commission charging—only when the consumer sees the outcome.

To meet the demands of our customers, we have designed several portfolio management solutions. Each investment strategy provides a diverse range of investment possibilities with varying degrees of risk and expected returns, all dependent on the client's suitability evaluation.

Our firm combines proprietary research with short-term momentum, mean reversion, and trend-following principles, as well as automated order execution and risk management techniques. In addition to well-known notions, our trading strategy incorporates volatility breakout, reversal, factor timing, and other uncorrelated signals.

Much has been said about the present market instability and the impending global recession. How do Skanestas Investments see the current market situation？

We do not see global determinants for the long-term development of markets with steady patterns in the present macroeconomic scenario, which is characterized by rising interest rates and liquidity outflows.

Volatility, on the other hand, will be prevalent in the markets, creating chances for firms like ours. We've done our homework and are well prepared for the upcoming volatility bursts. In terms of market movements, our trading tactics are adaptable.

The retail environment is today governed by two forces: regulation and compliance. How do you think this affects Skanestas Investments？

The financial services industry is one of the most severely regulated. Noncompliance comes at a hefty cost: much as in aviation, you can only fly safely if you pass all of the tests. We have established a robust compliance culture at Skanestas, with the CEO setting the tone.

Concerning the retail sector, authorities generally agree that complicated financial products and services are not appropriate for retail consumers; non-qualified investors cannot afford losses or adequately analyze their risks. This is why our positive target customer consists of professional clients and suitable counterparties.

Retail customers (of whom there are many in Skanestas) can only access non-complex items such as shares and bonds. This basic constraint across our product governance assists us in remaining compliant.

Furthermore, worldwide developments in financial market legislation impose ever-newer requirements on players. The advancements have also had an impact on our firm. As a legal member of the European and International Financial Markets, Skanestas is at the forefront of regulatory innovation.

Without a doubt, it has necessitated significant expenditures in important areas of our company, such as the development of compliance and AML departments. We can confidently state that Skanestas' transparency standards are among the highest in the business.

What distinguishes Skanestas Investments from the competition？

When it comes to trading, we take a methodical approach to managing our client's assets. To summarize, we use a number of diverse tactics that enable us to profit from both the market's rise and decline.

We are also proud of our customer service and custom-tailored solutions, which are made possible by our highly skilled team of professionals.

Of course, our most precious asset is our workforce. We are working hard to become the employer of choice. We want people to be passionate about working for us, so we create an environment and conditions for our employees that set us apart: performance-based bonuses, inflation-adjustable salary indexations, corporate outings, and we make sure to contribute to employees' training and development, to name a few.

For example, wages are adjusted with a premium to the inflation rate, implying that the corporation is incurring a direct, significant expense to maintain a pleasant climate inside the company.

Are there any future advancements in the works at Skanestas Investments, or what is on the horizon that customers would be interested in？

Looking forward, our strategic strategy involves, among other things, the protection and preservation of the company's continuous financial sustainability. We anticipate continued growth in client applications, and the amount of transactions at our firm is projected to remain profitable owing to an anticipated rise in trading revenues resulting from better services to current and new customers.

In terms of future developments, we want to list the bonds of one of our associated firms as well as launch an extension of the Skanestas-managed listed fund. We want to transition to primarily algorithmic trading by the end of 2022. Our well-developed and fully staffed R&D section backs up these ambitions.

We also want to diversify the markets with which we operate (for the time being, we concentrate on the American market) so that our portfolio management clients have additional trading instrument options. Our algorithms will trade in a variety of markets, with a focus on European and Asian marketable instruments.

Overall, the future appears bright for Skanestas Investments, and I am quite enthused about the company's planned initiatives.

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