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NUMERAI* IS A QUANT HEDGE FUND BUILT ON THOUSANDS OF CROWDSOURCED MACHINE
LEARNING MODELS.

NUMERAI* IS A QUANT HEDGE FUND BUILT ON THOUSANDS OF CROWDSOURCED MACHINE
LEARNING MODELS.




+27.51%

Numerai


+12.14%

Eureka Equity Market Neutral Index


+5.95%

Barclay Equity Market Neutral Index


-7.50%

Aurum Quant Equity Market Neutral Index


+3.32%

AQR Equity Market Neutral




NUMERAI IS STOCK SELECTION ALPHA.

80% of our returns come from non-factor exposure which means our fund can work
well when factors stop working. Many market neutral funds like AQR run factor
exposure risks which can perform poorly during times of market stress like in
2020.

article Take a deep dive into Numerai's performance ›

Sources: 1, 2, 3


GET IN TOUCH

If you're interested, schedule a call or mail us.

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investing@numer.ai


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INVESTMENT PROCESS

1 RESEARCH AND DATA

Numerai researches and combines a large number of data sources together and
transforms the data into regularized features and targets to create a pure
dataset for the data science community.

2 DATA TOURNAMENT

Datasets are made available to our community of data scientists who compete to
create the best predictive models in a tournament. Data scientists stake their
best models with our cryptocurrency, NMR.

3 META MODEL

Numerai creates the Meta Model by combining the latest predictions from the
tournaments and outputs a signal for each stock in our investable universe.

4 PORTFOLIO CONSTRUCTION

Model is fed into Numerai’s optimization engine to construct the optimal risk
penalized, market neutral portfolio.


SKIN IN THE GAME INCENTIVIZES THE CROWD.

Numerai uses cryptocurrency staking to incentivize our global network of data
scientists to submit the best possible machine learning models which power our
global equity hedge fund. We never trade crypto. But we have created an
institutional grade market neutral hedge fund using crypto incentives.


4,643

staked AI models power Numerai


$21,054,098

at stake



LEARN MORE ABOUT THE TOURNAMENT

Watch Building the Meta Model on Numerai and learn how Numerai combines
thousands of predictions into one meta model.

See the tournament of competing data scientists here.




FREQUENTLY ASKED QUESTIONS

What is Numerai?

Numerai is a quant hedge fund built on thousands of crowdsourced machine
learning models.

What's in the Numerai data set?

The Numerai data set consists of standard financial market data for a universe
of roughly 5,000 global equities. We assemble it from several market data
providers and consistently research both traditional and unique features in data
that's available over a 10-20 year timeframe.

Why give it away for free?

Numerai gives away data so that users around the world have free, hedge-fund
quality data to build their machine learning models -- data they would otherwise
not have access to. From inception, Numerai has believed that open
participation, in the form of readily available data, is a core component in
crowdsourcing solutions to significant data science problems.

Why is the data obfuscated for the tournament participants?

Finding a way to share data without revealing it, a solution that allows us to
freely distribute a high-quality set of financial data, was also an early, core
innovation that Numerai built. We needed a way to secure the value of the data
set while simultaneously retaining its unique features for the purpose of
building predictive models with machine learning.

How has the data set evolved over time?

Numerai data has significantly expanded over several iterations: The original
data set contained just 40 individual features and a single target variable. In
subsequent releases, the feature count expanded to 310, and then to over 1,000
most recently with our Fall 2021 release. We are (again) planning to 3x the
number of features with a final 2021 release before year-end, our Christmas
Miracle data drop. More data means better model performance.

Why and how do users stake on the models that they submit?

The ability for Numerai tournament participants to stake on the predictive
accuracy of their models is another core innovation we designed. "Skin in the
game" both rewards accurate predictions and penalizes inaccurate submissions.
Effectively, it is a way to align incentives and engender trust between Numerai
and those submitting their models.

Staking is done with NMR, a crypto-token Numerai launched in 2017. NMR trades
freely on several of the major crypto exchanges (Coinbase, Binance, etc.) and
its utility is solely to stake on models in the Numerai tournament. Based on a
scoring metric, users receive a fractional payout on their stake for performant
models, with a portion of the stake being burned (destroyed) for poorly
performing models. Stake payouts and burns occur on a blockchain with no direct
financial benefit accruing to Numerai.

What are the basic guidelines of the tournament?

The Numerai data tournament occurs weekly; Participants must submit ranked
signals for all ~5,000 global equities in the Numerai data set, forecasting
performance over a 20 day (four week) period. Only individual stock predictions,
and not any actual models nor code are submitted.

While staking is not required, only staked submissions will be incorporated into
Numerai's meta model which ultimately manages the trading for and the portfolios
in the Numerai hedge fund.

As of December 2021, approximately 3,800 staked models have been submitted for
the most recent data tournament, with a staked amount totaling $24 million.

What is the Numerai Meta Model?

The Numerai Meta Model is an ensemble of the individual models that are
submitted as part of the Numerai data tournament. Crowdsourcing predictive
models and then combining those signals at scale is another unique innovation
that Numerai has developed.

The concept of a performant meta model is predicated on the idea that a broad
and diverse selection of uncorrelated models will more accurately predict the
outcome of a complex data science problem. Particularly, in the case of
predicting financial markets where high accuracy and low variance (a high Sharpe
ratio) matter more, this kind of ensembling exercise is doubly helpful.

Five and half years of iterating on this concept of meta model supremacy (better
than simple regression, better than an individual handful of correlated machine
learning models) has proven out. Numerai's ability to design the right kind of
targets in our data set and our ability to neutralize the impact of traditional
risk factors have also contributed to the growth in performance of the Numerai
hedge fund over the past several years.

What are the characteristics of the Numerai hedge fund portfolios?

The Numerai hedge fund consists of equally weighted long and short portfolios
with approximately 300 individual equities in each portfolio. The beta of the
combined long/short portfolio is close to zero, uncorrelated to broad market
movements and also not exposed to traditional market risk factors such as
country, sector or market cap groupings.

What accounts for the excellent fund performance during times of significant
market dislocation, like in 2020?

Through several years of iterating on things like data, staking and meta model
composition, Numerai has been able to consistently construct a market portfolio
where 80%+ of the return is derived from true idiosyncratic (stock selection)
risk, rather than the usual factors that drive returns. During times of severe
market dislocation like we saw in 2020, a beta-neutral portfolio that's also not
exposed to traditional factors will significantly outperform both the market and
other purported "market neutral" funds.

What is the current fund AUM and what is the expected fund capacity?

As of December 1, 2021 the AUM is roughly $48mm. We anticipate reaching $100mm
in assets in the coming months and believe that the overall capacity for the
strategy given the current structure is between $300-$400mm. However, because
Numerai has ability to adapt things like the data set and the frequency with
which we trade, capacity can be expanded to a multiple of that.


TERMS

Minimum Subscription $1 million Redemptions Monthly with 30-day notice Lock-up
No lock-up Management Fee 1% annualized Performance Fee 25% with high-water mark
(Class A)
20% with high-water mark (Founders Class)


PORTFOLIO EXPOSURES

Gross & Net Exposure Gross: 500% - 600% (Net: ~0%) Investment Products 100%
Equities (Across market capitalizations) Holding Period 2-4 Months (Weekly
trading)


RISK MANAGEMENT

Maximum position size < 2% AUM, monitored daily Trading Monitor for event risk
and close or restrict security Market Neutral Market, country and sector neutral
Factor Exposure Beta of ~0 with limited exposure to core style factors Target
Volatility < 10% Industries All except Biotechnology and REITS


SERVICE PROVIDERS

Prime Broker UBS Tax Advisor KPMG Administrator SS&C Technologies Auditor KPMG
Legal Counsel (US) Cole-Frieman Mallon Legal Counsel (Cayman) Maples Compliance
Consultant Titan Regulation

The information in this presentation was prepared by Numerai and is believed by
Numerai to be reliable and has been obtained from public sources believed to be
reliable. Numerai makes no representation as to the accuracy or completeness of
such information. Opinions, estimates and projections in this presentation
constitute the current judgment of Numerai and are subject to change without
notice. Any projections, forecasts and estimates contained in this presentation
are necessarily speculative in nature and are based upon certain assumptions. It
can be expected that some or all of such assumptions will not materialize or
will vary significantly from actual results. Accordingly, any projections are
only estimates and actual results will differ and may vary substantially from
the projections or estimates shown. This presentation is not intended as a
recommendation to purchase or sell any commodity or security. Numerai has no
obligation to update, modify or amend this presentation or to otherwise notify a
reader thereof in the event that any matter stated herein, or any opinion,
projection, forecast or estimate set forth herein, changes or subsequently
becomes inaccurate. Securities of the Fund are not registered with any
regulatory authority, are offered pursuant to exemptions from such registration,
and are subject to significant restrictions.

Performance results of Numerai’s hedge fund is presented for information
purposes only. Numerai’s fund performance result was calculated net of
management fee and incentive allocation, assuming a management fee at the rate
of 1/12 of 1% (1% annually) of beginning net assets each month paid in advance
and an annual incentive allocation calculated at a rate of 20% of trading
profits. Rate of return is calculated by dividing net performance by beginning
net assets. Performance of individual investors may vary based upon differing
management fee and incentive allocation arrangements, and the timing of
contributions and withdrawals. Returns are inclusive of the reinvestment of
dividends and other earnings, including income from new issues. Returns may vary
for investors who are restricted from participating in new issues. Performance
results have been reviewed and audited by an independent accountant. The
information provided is historical and is not a guide to future performance.
Investors should be aware that a loss of investment is possible. No
representation is being made that any investor will or is likely to achieve
profits or losses similar to those shown. Performance figures are net of costs
and fees.

Aurum Quant Equity Market Neutral contains information published by Aurum
Research Limited of hedge funds that have been assigned a “Quantitative Equity
Market Neutral” strategy. Such information has not been audited and is provided
on an “as is” basis.

The Eurekahedge Equity Market Neutral Hedge Fund Index (Bloomberg Ticker -
EHFI751) is an equally weighted index of 33 constituent funds. The index is
designed to provide a broad measure of the performance of underlying hedge fund
managers/. The monthly index values are the respective mathematical means
(average) of the monthly returns of all hedge fund constituents in the index at
that time. Unlike other indices, they are not asset-weighted (see relevant
paragraph below) nor median returns. A simple example of the differences between
a mean and a median return index can be found here

The Barclay Equity Market Neutral Index is recalculated and updated real-time on
this page as soon as the monthly returns for the underlying funds are recorded.
Only funds that provide us with net returns are included in the index
calculation. The number of funds that are currently included in the calculations
for the most recent months can be found here. Please note that the calculation
for the number of funds is time-stamped and that the number of funds will
continue to increase until all funds categorized within the sector have reported
monthly returns.

Numerai’s hedge fund is very unlikely to be a suitable investment for individual
investors due to the tax treatment of short term capital gains. Numerai’s hedge
fund is designed primarily for institutional investors like endowments and
pension funds.

Numerai’s crypto token NMR is a staking token used on Numerai by Numerai’s data
scientists. NMR is a volatile cryptocurrency which moves up an down with other
cryptocurrencies based on supply and demand.

[*]: "Numerai Master Fund One, Ltd., hereinafter referred to as "Numerai"

[†]: Numerai Performance is reported net of fees using Founders Class structure
of: 1% Management fee and 20% Performance fee
Numerai, San Francisco