The demand for traditional brokerage services and portfolio management has never been higher, with markets now in flux. Considering a growing premium for these services, Finance Magnates spoke with Kirill Kuchinskiy, Director of Skanestas Investments for his perspective on the company and its future.

How has Skanestas Investments Limited evolved in terms of personnel growth and other metrics? Why was the company established in Cyprus?

Skanestas was created as an EU-licensed firm, built, and growing on EU-regulatory standards. Our vision of business opportunities is the ability to operate on EU and US stock markets. Being based out of Cyprus has allowed us to have an easy access to both.

Ever since company’s incorporation in 2013 it has grown rapidly, boosting from 4 employees to over 40 employees as of this moment.

2020-21 saw a rapid growth when the company worked out new research and development plans. It mostly affected our IT, R&D (research & development) and trading departments. Skanestas has transformed from a buy-side broker to an asset manager, demonstrating the ability to adjust to market changes and to follow its strategic plans consistently.

How has Skanestas Investments grown over the years to evolve into the company it is today?

I think the most important steps must be the company being incorporated in June 2013 and receiving its license in October 2014. By January 2015, the company has become fully operational. Moving forward, by early 2016 thanks to dynamic inflow of customers the company was able to show its first substantial results.

Further growth of the company implied the necessity of using its own capital. We had our license extended in January 2019 by adding dealing on own account to it. I joined the Board of Directors in April 2019, while also assuming the role as one of the company’s executive directors. This was a key moment for me, which paved the way for a change of leadership.

In October 2019, I became the sole owner of Skanestas Investments. Under my leadership the company’s direction and the goals were re-shaped, the focus shifted from order execution to asset management and structured solutions.

Kirill Kuchinskiy, Director of Skanestas Investments
Kirill Kuchinskiy, Director of Skanestas Investments

These products allowed to stream additional flow of liquidity towards the company.

In 2020, Skanestas Investments became a custodian, a direct clearing member and a trading member of the Cyprus Stock Exchange. It helped a lot in developing infrastructural solutions.

By 2021 our team started working on integrating algorithmic trading. R&D department, responsible for developing trading algorithms, was created and automated risk monitoring system was built.

We closed 2021 with 48% profit in portfolio management, which drastically outperformed the S&P500 and Nasdaq’s corresponding year performance.

In 2022, we have extended our license and obtained the General Operator status with the Cyprus Stock Exchange.

As of now, we have fully staffed our R&D department, which will allow us to expand potential trading algorithms and improve quality of our research.

Can you explain the services the company has on offer?

The simple fact is Skanestas Investment is a traditional financial company. Our main principle is that we try to treat our customers in a way we would like to be treated. Our focuses are portfolio management services and structured solutions for the customers. Traditional brokerage is also an option, though not of the highest priority.

When providing any of the mentioned services we abide by the principles of best execution, fairness, and transparency. All disclosures are done in a way to satisfy any demand from any customer.

Discretionary portfolio management is the key product for future development.

Portfolio management is based on the profit-sharing model, where scaled performance fee is charged on the profits, subject to a hurdle rate and a high watermark. The key advantages for the customers are high watermark principle, absence of management fees and no interim commission charging – only when the customer sees the result.

We have tailored different strategies under portfolio management to suit the needs of our clients. Each investment strategy offers a wide spectrum of investment options with varying levels of risk and return expectations, always based on the results of the suitability assessment the client has taken.

Our company combines unique research with short-term momentum, mean reversion, trend following concepts with automatic order execution and risk procedures. Apart from well-known concepts we use volatility breakout, reversal, factor timing, and other uncorrelated signals under our trading approach.

A lot has been said about the current market volatility and trajectory towards a global recession. How does Skanestas Investments perceive the situation unfolding across markets?

In the current macroeconomic situation with a tendency towards increasing interest rates and liquidity outflow, we do not see global factors for the long-term growth of markets with stable trends.

However, volatility will be present in the markets, and it creates opportunities for companies like ours. We have done our research and feel completely ready for the expected volatility bursts. Our trading strategies are adaptive in terms of market trends.

Regulation and compliance are two forces currently governing the retail landscape. How do you feel this influences Skanestas Investments?

The financial services space is one of the most heavily regulated industries. The cost of non-compliance is high: like in aviation, you can only fly safely if you passed all the checks. In Skanestas we have built strong compliance culture, setting tone at the top.

As for retail sector you are asking about, the common position of the regulators – complex financial products and services are not suitable for retail clients; non-qualified investors cannot afford losses or fully assess their risks. We support this position which is why our positive target clientele are professional clients and eligible counterparties.

Retail clients (who are quite few in Skanestas) have access to non-complex products only, like shares and bonds. This fundamental restriction throughout our product governance helps us always remain compliant.

Additionally, the global changes in the financial markets’ regulation lay ever newer obligations on the participants. The innovations have touched our company too. Skanestas, as a legitimate member of the European and International financial market, is on the cutting edge of the regulatory innovations.

Doubtlessly, it has required us to make new investments in the relevant parts of our business, such as the expansion of the departments responsible for the compliance and AML. We can maintain in all confidence that the transparency standards achieved by Skanestas are pioneering standards in the whole industry.

What sets Skanestas Investments apart from the competition?

When it comes to our trading, we use a systematic approach to managing customer’s assets. To cut the explanation short, we apply several diversified strategies that allow us to get the returns on both the rise and the fall of the market.

We also take pride in our customer service and customer-tailored solutions which is made possible by our team of highly qualified specialists.

And of course, our employees are our most valuable asset. We are striving towards becoming the employer of the choice. We want people to be passionate about working in our company and that’s why we create environment and conditions for the employees that would make us stand out – we have performance-based bonuses, inflation-adjustable salary indexations, corporate outings and we make sure to contribute to employees’ training and development – that’s to say a few.

Just as an example, the salaries are indexed with the premium to the inflation rate – that means the company is accepting direct substantial cost to maintain positive environment within the company.

Are there any future developments in the pipeline at Skanestas Investments or what is on the horizon that is of interest for clients?

Looking forward our strategic plan includes, among other things, the security and maintenance of the on-going financial viability of the company. We do expect a continuous growth in client applications and due to an anticipated increase in trading revenues, arising from an improved services to existing and new clients the volume of transactions our company is expected to remain profitable.

In terms of future developments, we are hoping to list the bonds of one of our affiliated companies as well as launch an expansion in terms of listed fund that will be managed by Skanestas. We plan on switching into mostly algorithmic trading by the end of 2022. These plans are backed up by our developed and fully staffed R&D department.

We’re also planning on diversifying markets we work with (for the moment we focus on the American market) so our Portfolio Management clients would have more choice in terms of trading instruments. Our algorithms will be trading different markets – more expansion into European and Asian marketable instruments.

Overall, the future looks promising for Skanestas Investments, and I am very excited with the upcoming moves the company is poised to make.

The demand for traditional brokerage services and portfolio management has never been higher, with markets now in flux. Considering a growing premium for these services, Finance Magnates spoke with Kirill Kuchinskiy, Director of Skanestas Investments for his perspective on the company and its future.

How has Skanestas Investments Limited evolved in terms of personnel growth and other metrics? Why was the company established in Cyprus?

Skanestas was created as an EU-licensed firm, built, and growing on EU-regulatory standards. Our vision of business opportunities is the ability to operate on EU and US stock markets. Being based out of Cyprus has allowed us to have an easy access to both.

Ever since company’s incorporation in 2013 it has grown rapidly, boosting from 4 employees to over 40 employees as of this moment.

2020-21 saw a rapid growth when the company worked out new research and development plans. It mostly affected our IT, R&D (research & development) and trading departments. Skanestas has transformed from a buy-side broker to an asset manager, demonstrating the ability to adjust to market changes and to follow its strategic plans consistently.

How has Skanestas Investments grown over the years to evolve into the company it is today?

I think the most important steps must be the company being incorporated in June 2013 and receiving its license in October 2014. By January 2015, the company has become fully operational. Moving forward, by early 2016 thanks to dynamic inflow of customers the company was able to show its first substantial results.

Further growth of the company implied the necessity of using its own capital. We had our license extended in January 2019 by adding dealing on own account to it. I joined the Board of Directors in April 2019, while also assuming the role as one of the company’s executive directors. This was a key moment for me, which paved the way for a change of leadership.

In October 2019, I became the sole owner of Skanestas Investments. Under my leadership the company’s direction and the goals were re-shaped, the focus shifted from order execution to asset management and structured solutions.

Kirill Kuchinskiy, Director of Skanestas Investments
Kirill Kuchinskiy, Director of Skanestas Investments

These products allowed to stream additional flow of liquidity towards the company.

In 2020, Skanestas Investments became a custodian, a direct clearing member and a trading member of the Cyprus Stock Exchange. It helped a lot in developing infrastructural solutions.

By 2021 our team started working on integrating algorithmic trading. R&D department, responsible for developing trading algorithms, was created and automated risk monitoring system was built.

We closed 2021 with 48% profit in portfolio management, which drastically outperformed the S&P500 and Nasdaq’s corresponding year performance.

In 2022, we have extended our license and obtained the General Operator status with the Cyprus Stock Exchange.

As of now, we have fully staffed our R&D department, which will allow us to expand potential trading algorithms and improve quality of our research.

Can you explain the services the company has on offer?

The simple fact is Skanestas Investment is a traditional financial company. Our main principle is that we try to treat our customers in a way we would like to be treated. Our focuses are portfolio management services and structured solutions for the customers. Traditional brokerage is also an option, though not of the highest priority.

When providing any of the mentioned services we abide by the principles of best execution, fairness, and transparency. All disclosures are done in a way to satisfy any demand from any customer.

Discretionary portfolio management is the key product for future development.

Portfolio management is based on the profit-sharing model, where scaled performance fee is charged on the profits, subject to a hurdle rate and a high watermark. The key advantages for the customers are high watermark principle, absence of management fees and no interim commission charging – only when the customer sees the result.

We have tailored different strategies under portfolio management to suit the needs of our clients. Each investment strategy offers a wide spectrum of investment options with varying levels of risk and return expectations, always based on the results of the suitability assessment the client has taken.

Our company combines unique research with short-term momentum, mean reversion, trend following concepts with automatic order execution and risk procedures. Apart from well-known concepts we use volatility breakout, reversal, factor timing, and other uncorrelated signals under our trading approach.

A lot has been said about the current market volatility and trajectory towards a global recession. How does Skanestas Investments perceive the situation unfolding across markets?

In the current macroeconomic situation with a tendency towards increasing interest rates and liquidity outflow, we do not see global factors for the long-term growth of markets with stable trends.

However, volatility will be present in the markets, and it creates opportunities for companies like ours. We have done our research and feel completely ready for the expected volatility bursts. Our trading strategies are adaptive in terms of market trends.

Regulation and compliance are two forces currently governing the retail landscape. How do you feel this influences Skanestas Investments?

The financial services space is one of the most heavily regulated industries. The cost of non-compliance is high: like in aviation, you can only fly safely if you passed all the checks. In Skanestas we have built strong compliance culture, setting tone at the top.

As for retail sector you are asking about, the common position of the regulators – complex financial products and services are not suitable for retail clients; non-qualified investors cannot afford losses or fully assess their risks. We support this position which is why our positive target clientele are professional clients and eligible counterparties.

Retail clients (who are quite few in Skanestas) have access to non-complex products only, like shares and bonds. This fundamental restriction throughout our product governance helps us always remain compliant.

Additionally, the global changes in the financial markets’ regulation lay ever newer obligations on the participants. The innovations have touched our company too. Skanestas, as a legitimate member of the European and International financial market, is on the cutting edge of the regulatory innovations.

Doubtlessly, it has required us to make new investments in the relevant parts of our business, such as the expansion of the departments responsible for the compliance and AML. We can maintain in all confidence that the transparency standards achieved by Skanestas are pioneering standards in the whole industry.

What sets Skanestas Investments apart from the competition?

When it comes to our trading, we use a systematic approach to managing customer’s assets. To cut the explanation short, we apply several diversified strategies that allow us to get the returns on both the rise and the fall of the market.

We also take pride in our customer service and customer-tailored solutions which is made possible by our team of highly qualified specialists.

And of course, our employees are our most valuable asset. We are striving towards becoming the employer of the choice. We want people to be passionate about working in our company and that’s why we create environment and conditions for the employees that would make us stand out – we have performance-based bonuses, inflation-adjustable salary indexations, corporate outings and we make sure to contribute to employees’ training and development – that’s to say a few.

Just as an example, the salaries are indexed with the premium to the inflation rate – that means the company is accepting direct substantial cost to maintain positive environment within the company.

Are there any future developments in the pipeline at Skanestas Investments or what is on the horizon that is of interest for clients?

Looking forward our strategic plan includes, among other things, the security and maintenance of the on-going financial viability of the company. We do expect a continuous growth in client applications and due to an anticipated increase in trading revenues, arising from an improved services to existing and new clients the volume of transactions our company is expected to remain profitable.

In terms of future developments, we are hoping to list the bonds of one of our affiliated companies as well as launch an expansion in terms of listed fund that will be managed by Skanestas. We plan on switching into mostly algorithmic trading by the end of 2022. These plans are backed up by our developed and fully staffed R&D department.

We’re also planning on diversifying markets we work with (for the moment we focus on the American market) so our Portfolio Management clients would have more choice in terms of trading instruments. Our algorithms will be trading different markets – more expansion into European and Asian marketable instruments.

Overall, the future looks promising for Skanestas Investments, and I am very excited with the upcoming moves the company is poised to make.