CPP Investments Partners Up With Inpher to Develop Unique Datasets

Anna Gordon of Chief Investment Officer reports that CPP Investments will collaborate with Inpher to develop a unique dataset for investment forecasting:

The Canada Pension Plan Investment Board has entered into an agreement with Inpher, a company that has developed a technology to protect data while it is being analyzed. The technology, called Secret Computing, allows data analysts to run complex, collaborative, machine-learning models without compromising the data’s security.

CPP hopes that using Inpher’s technology, they will be able to develop a unique dataset that helps predict market trends and allows its investment team to perform above the market, according to the press release. Through this collaboration, CPP aims to bring together both data contributors and asset managers.

“Working with Inpher to leverage their technology to access non-public data sources aligns with our objective to enhance our informational edge and generate value for the CPP Fund over the long run,” said Daniel Wroblewski, managing director and head of CPP Investments’ Alpha Generation Lab, which looks for creative new ways to increase investment returns.

Inpher itself is a relatively new company which started in 2015. It is currently listed as a late-stage venture capital company, according to PitchBook. Its list of investors includes names like JP Morgan Chase & Co., Bowery Capital, and Alpana Ventures. 

Ultimately, CPP aims to use Inpher’s technology to analyze macroeconomic trends more quickly, predict company performance, and better understand aggregate portfolios.  

CPP is the largest pension in Canada, with approximately $440 billion (C$550 billion) in assets under management.

CPP Investments put out this statement on this venture:

Canada Pension Plan Investment Board (CPP Investments) and Inpher, Inc., the pioneers of Secret Computing©, have agreed to form a unique ecosystem of collaborators to create a network for secure data analysis.

Inpher’s cryptographic platform allows machine learning models to be trained on data sources without exposing sensitive information or moving the data outside its owner’s systems. Through this data privacy approach – and the development of a scalable data collaboration network – CPP Investments and Inpher seek to bring together a group of asset managers and data contributors to generate new insights.

For investment management organizations, such as CPP Investments, deriving insight from distinctive data sources can enhance investment research and help generate returns above industry benchmarks. However, there are few unique data sets available in the market, as many firms have access to the same commoditized data streams through commercial providers. Through this collaboration, CPP Investments will work closely with various organizations to incorporate new data sources into forecasting and investment decision-making, while keeping that data private and secure.

“Working with Inpher to leverage their technology to access non-public data sources aligns with our objective to enhance our informational edge and generate value for the CPP Fund over the long run,” said Daniel Wroblewski, Managing Director, Head of CPP Investments’ Alpha Generation Lab, which seeks transformational ways to deliver strong financial performance. “As some data sources become more mainstream, we seek to be a leader in finding and putting to work novel data that allow us to create differentiated insights.”

This model will be built amid increased demand for privacy-enhancing computation capabilities that can process many types of data. Higher consumer awareness, changing data privacy regulations, and new secure artificial intelligence applications have contributed to an evolving data landscape.

“As a recognized leader in asset management, CPP Investments is the ideal partner to leverage next-generation technologies to transform the industry,” said Jordan Brandt, Chief Executive Officer of Inpher. “We believe that CPP Investments’ Alpha Generation Lab has unique expertise and an innovative vision to apply privacy- enhancing technologies to investment use cases.”

Inpher and CPP Investments aim to establish a trusted network of partners, including traditional data suppliers, corporates, and peer investors, to improve our collective ability to leverage data assets. Examples could include more precise and faster analysis of macroeconomic trends, enhanced understanding and prediction of company fundamentals and competitive dynamics, or collaboration with peer investors to derive insights on aggregate portfolios.

About the Alpha Generation Lab

CPP Investments’ Alpha Generation Lab (Lab) was created to identify and pursue research initiatives and transformational changes focused on the intersection of investing, technology and data. The Lab’s mandate is to develop significant advantages for CPP Investments in the search for outsized investment performance by accelerating innovative investment capabilities focused on technology and data. This group is accountable for conceptualizing, incubating and building new alpha-generating capabilities across the organization.

For more details on the collaboration with Inpher, the data sharing model, or applicability of data sources to the network, please contact borderlessdata@cppib.com.

About CPP Investments

Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the more than 21 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At December 31, 2021, the Fund totalled C$550.4 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Facebook or Twitter.

About Inpher

Inpher is a New York-based, global Secret Computing© company that powers privacy-preserving machine learning and analytics to unlock the value of sensitive, siloed data and enable secure collaboration across teams and organizations. Data scientists leverage Inpher’s XORTM SaaS to train and run ML models on deeper and more diverse data. At the same time, it is encrypted to improve model performance with mathematically guaranteed data privacy and residency. Global enterprises have used XOR in multiple vertical applications across finance, healthcare, and IoT. Inpher’s team of recognized leaders in the fields of Multiparty Computation (MPC), Fully Homomorphic Encryption (FHE), and Federated Learning (FL) continue to deliver the fastest, high-precision privacy-preserving capabilities. Please visit www.inpher.io or follow us on LinkedIn or Twitter for more information.

Now, I must admit, I never heard about Inpher before reading this press release yesterday but the fact that CPP Investments is partnering up with it tells me that they conducted extensive due diligence and this company is providing something which can be of considerable value to the organization.

As discussed above, the partnership is to develop a unique dataset that helps predict market trends and allows its investment team to perform above the market.

Moreover, Inpher and CPP Investments aim to establish a trusted network of partners, including traditional data suppliers, corporates, and peer investors, to improve their collective ability to leverage data assets.

Did you catch that part about peer investors? That leaves the door wide open for all of Canada's large pensions and other global pensions to be part of this project.

Ultimately, CPP Investments aims to use Inpher’s technology to analyze macroeconomic trends more quickly, predict company performance, and better understand aggregate portfolios.  

Take it from me, this is no easy feat and if you're skeptical, you have every right to be.

But if this new technology does provide "meaningful  edge" then I say go for it, leverage off all the datasets to try to better understand shifts in macroeconomic trends.

For a fund the size of CPP Investments, this is critically important because being able to discern trends ahead of time allows you to better position the fund as trends shift.

It also allows you to capitalize on opportunities no matter where they arise, across public and private markets all over the world.

Alright, I don't want to get ahead of myself but I suggest your read more about Inpher here to really appreciate this company and how it will help CPP Investments develop unique datasets.

This isn't the first venture I've heard of between a large Canadian pension and a technology data driven shop.

A few years ago, BCI invested in the UK based ClearMacro which also helps institutional investors integrate actionable insights from data into their portfolios for smarter decision-making:

ClearMacro helps institutional investors navigate challenges such as pressure on fees and cost structures or those with limited ability to effectively leverage the exponential growth of available data.

Traditional research has become uneconomic yet most investment firms struggle to create and execute alternative data-driven models.

ClearMacro helps investors develop a viable data strategy to ensure that data is a performance edge and not a cost.

These data analytics projects are critically important and if successful, all institutional investors will benefit from them.

Alright, I wish I can write more on this topic but I had a busy day and can't add much more than what I've disclosed above.

Below, Inpher has pioneered cryptographic Secret Computing® that enables advanced analytics and machine learning while keeping data private, secure, and distributed. Don’t pick between data privacy and data usability — you can finally have both! 

I also embedded another discussion on securely leveraging data to optimize business decisions.

Update: To learn more about this secure data collaboration please reach out to borderlessdata@cppib.com