Confluence Capital is a data analytics and investment strategy firm that specializes in the burgeoning area of environmental / social / governance (“ESG”) sustainability. We merge fundamental, technical, and quantitative analysis into one streamlined, systematic process that generates predictive performance metrics — along with other valuable, more material insights. We apply our process to traditional securities, both equity and credit. Simply put, Confluence offers investors the superior information they need to create an edge and improve returns.
Our mission is to supply investors with the most unqiue, material, and reliable information possible by using both traditional and innovative approaches to data analytics.
Confluence Capital was founded in 2008 as a private L.P. fund-of-funds. It was designed to generate consistent, uncorrelated returns for investors using a multi-strategy approach. During its decade-long run, the fund repeatedly produced top-quartile results as compared to its peers — all while having a negative beta relative to U.S. equities.
In 2015, Confluence helped found Etho Capital with the goal of creating a broadly diversified, high-performing stock index of American companies having minimal carbon footprints or output. Later the same year, an ETF (ticker: ETHO) was launched to track Etho’s index. Since its inception in November 2015, the fund has outperformed the U.S. market by double digits on a percentage basis while exhibiting a comparable risk profile. Though no longer actively involved with Etho Capital, our team continues to support the index’s annual rebalance and reconstitution.
In 2017, Confluence began focusing more heavily on analytics by developing a cutting-edge process that integrates multiple data inputs and methods of analysis to find material insights previously unseen. For instance, because of our work on various ESG-themed investment strategies, we knew that ESG-sustainabilty data holds great potential and untapped value — especially when the proper analytical process is applied to it. Hence, we have the unique ability to take such data and generate predictive performance metrics for stocks from it. These results, among others that we have, can then be used by investors to improve returns or mitigate risk. Going forward, we plan to expand the scope of our work with ESG data to include credit. There is more to come.