Wall Street veterans raise capital for AI-run stock strategy under Poesis

The team and the plan

Wall Street veterans Alex Popa, 46, and Charles Elkan, 63, are fundraising for AI Clarity, the debut strategy at their firm Poesis. Popa spent more than 15 years at Capital Group and was a portfolio manager for the Growth Fund of America. Before that he served Romania's prime minister as an economic adviser and later as the country's secretary of state for foreign investments. Elkan previously headed the machine-learning function at Goldman Sachs Group Inc.

On Tuesday, Poesis said AI Clarity is expected to accept third-party clients early next year. The pair has been running their own money in the approach since August and, per individuals with knowledge of the firm's plans, they intend to add more strategies and eventually build a multistrategy fund for institutional investors.

How the strategy works

AI Clarity holds between 80 and 100 US listed large cap stocks and targets a three year holding period. The agents, powered by quantitative models, handle research, stock selection and trade timing. When they detect a possible market downswing, the playbook calls for hedging by shorting a stock index.

Humans still set the guardrails. Popa and his team define risk limits and other parameters, and they review and approve orders. The design goal is to top the market while sidestepping big tumbles.

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Tests, fees and scale

A one week experiment showed how far the automation could go. Poesis had teams of agents run two stock strategies with no human intervention, one modeled as a focused buy-and-hold style akin to Warren Buffett's and another a fast trading, market neutral quant strategy. Both stayed within their mandates.

Poesis operates from Menlo Park, California, with a 10 person team that includes data scientists and engineers. The firm will charge a 1% management fee and a 20% performance fee for the equity strategy. Those people added the duo could manage billions with fewer than 100 employees, which would keep operating costs below those of giant multistrats such as Citadel and Millennium Management.

Why it matters for your portfolio

Poesis says its AI is designed to continually adapt based on market experience, and the firm's website notes the name Poesis derives from the Latin term for poetry and the Greek term for creation, "combining art and science into something lasting." In plain English: a core in big US names, machine driven stock picking, human approval, and index shorts as the umbrella when skies darken. If the founders hit their scaling goals, the next chapter is a multistrategy platform aimed at institutions.

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