This article first appeared in Wealth, The Edge Malaysia Weekly on May 25, 2026 - May 31, 2026

When two veteran investors rekindled their friendship after the recent pandemic, they set out to build something special — an algorithmic fund conceived, coded and run entirely by Malaysians. The fund saw a return of 42.19% at end-2025, after going live in January last year, outperforming the S&P 500 by about 1½ times.

As at April 17, it remains ahead, having gained 7.47% year to date against the US benchmark’s 2.86% — without a single investment decision made by a human being, say the fund’s founders.

The key figures behind the Singapore-domiciled PK Cypher US Fund are Anthony Siau, founder and CEO of venture capital firm Kairos Capital Group Pte Ltd, and Taufiq Iskandar, CEO of Private Pension Administrator Malaysia (PPA), which oversees the Private Retirement Schemes (PRS). He was previously a fund manager, an investment banker and the CEO of Penjana Kapital Bhd, among others.

While Taufiq is the brain behind the fund’s Good Eye algorithmic model, the fund was structured with Siau’s expertise and coded by team members Marcus Lim and Wong Jen Pin.

“There’s actually no fund manager for this fund. My job as chairman of the variable capital company (VCC) is to make sure the model is robust by running back-testing at least once a month. The rest is done by the algo, even how much to buy [from a basket of stocks],” says Taufiq.

Put simply, a VCC is a fund structure incorporated as a company that was introduced by the Singapore government in 2020. The PK Cypher US Fund is incorporated under PrimeVest Kairos Capital VCC, with Siau as managing partner and Taufiq the chairman of the investment committee.

With a minimum investment of US$200,000, the fund has a hurdle rate of the 10-year US Treasury yield plus 5%, amounting to about 9.4% at the time of writing. There is a 2% annual management fee and a 20% performance fee that comes with a high water mark.

The high hurdle rate reflects the fund’s short track record, but is equally a display of the founders’ confidence. “We are really confident of our model. Most hedge fund managers have a fixed hurdle rate of 6% to 8%,” says Siau.

At the time of writing, Siau had been meeting with Malaysian and Singaporean family offices, bankers and asset managers to raise funds. The current investors of the fund are family members and close friends of the founders. PrimeVest has a team of six, including its partner and investor relations officer Kay Mustaffa and compliance and risk officer Loo Ding Bang.

The Good Eye model runs its algorithm daily, extracting data primarily from Bloomberg and analysing it before the team sends out a batch order to brokers on Fridays for trades to be executed and the portfolio rebalanced. Throughout the process, the algorithm continues to be back-tested and refined.

The founders believe they have found a scalable business model, with Taufiq’s investment thought process coded into an algorithm that screens, selects and allocates stocks entirely on its own.

Siau says Kairos Capital Group is riding the right trend as artificial intelligence (AI) rewrites the rules of the asset management industry, especially in developed markets. Fund houses are finding ways to incorporate AI into their investment and business processes for better decisions and leaner operations.

He says the traditional way of investing has been in decline, most prominently in developed markets such as the US. Money is increasingly flowing into low-cost passive products such as exchange-traded funds (ETFs), largely due to the persistent underperformance of actively managed funds against benchmark indexes.

Another bright spot is quantitative funds, including algo funds, that utilise data-driven mathematical and statistical models for investment decisions, driven by rapidly advancing AI capabilities and strong outperformance over specific periods. Prominent players in the space include Renaissance Technologies and Two Sigma.

Siau says traditional discretionary fund managers globally are feeling the heat from fee compression, higher transparency and alpha inconsistency. On the other hand, quant and systematic strategies are gradually gaining ground as they offer repeatability, discipline and scalability. "We are moving into a phase where alpha is increasingly engineered, not improved," he says.

In an interview with Wealth, Taufiq explains how the model works.

He says the Good Eye model uses 17 sub-factors to rank the 500 stocks on the S&P 500. The sub-factors are then applied to mathematical formulas that assign the stocks a score based on two criteria: valuation and momentum.

With the two sets of scores, the stocks are plotted on a graph with two axes — valuation and momentum — with nine sub-quadrants. Those with the highest combined score appear in the top-right corner of the graph, the strong buy quadrant, while others are scattered around the graph, with the lowest scorers in the bottom-left quadrant.

Overall, the model assigns a weighting of 50% and 40% to valuation and momentum respectively, with the remaining 10% allocated to risk covariance for risk management.

Put simply, risk covariance means comparing the volatility of a stock price to its earnings growth. If the share price moves above one standard deviation without an earnings revision, it could be driven by insider trading or market euphoria, which the algorithm automatically screens out.

Taufiq says the 17 sub-factors are not viewed in isolation as they interact with each other in the mathematical formulas coded into the algorithm. Based on the fund’s marketing deck as at April 12, these sub-factors include commonly used financial ratios, such as price-to-book, price-earnings, return on common equity and return on assets.

What’s unique, according to Taufiq, is the forward-looking ratios and figures provided by analysts. He says the momentum axis does not refer to price momentum, but a company’s earnings momentum that compares the most recently revised current year earnings projection to its following year’s earnings, which he calls delta.

In mathematics, delta means the difference between one value and another. “I don’t look at earnings growth. I look at the delta. The earnings growth is priced in … I look at the change in people’s sentiment. You may call it projection, I call it sentiment,” he says.

The algorithm also looks at the stock recommendations made by analysts, whether they assign a “buy”, “hold” or “sell” rating. Assuming a stock is covered by 15 analysts with eight “buys” and seven “sells”, it wants to see if the “buy” calls increase or vice versa.

The number of analysts covering a stock matters, says Taufiq. “I do not want to look at a stock with only three analysts’ coverage, which is too low quality for me.”

In short, the algorithm relies on the wisdom of experts instead of the fund manager’s alone, he says. It also rides investor sentiment in search of gains.

“I believe you have heard the saying that investing should be emotionless. But I’m a contrarian in that sense. In my view, the market is a distillation of people’s emotions. Over the short term, it is a weighing scale of the emotions of the crowd, right? You can’t take emotions out of investing. So, the issue we have is individual biases, which is why I believe in the wisdom of the crowd [the analysts], not of one person,” says Taufiq.

As at late April, the Good Eye model had strong “buy” recommendations on familiar US companies like Nvidia Corp and Micron Technology Inc, and less familiar names such as Huntington Bancshares Inc and Citizens Financial Group Inc.

One might wonder why the PK Cypher US Fund only rebalances the portfolio once a week when its algorithm changes all the time based on data input. Shouldn’t it be rebalanced as soon as possible? Taufiq says doing so would introduce more volatility to the portfolio, which investors may not be able to stomach. It would also increase the cost of the fund.

Hence, the portfolio is rebalanced every Friday. “Again, we are contrarian. We rebalance it on Friday because the market usually buys on Monday and sells on Friday to avoid the weekend. We do it the opposite way so we can get the best price,” he explains.

Taufiq says the fund’s algorithm also detects the market regime to decide how much of investors’ money should be deployed into the market. It is based on six indicators and divided into two categories, namely credit stress and equity stress. The indicators could include the credit default swap spread and equity risk premium, among others. More stocks are sold and cash held depending on the severity of the stress level detected in the market.

“Portfolio construction mainly includes three things: the first is to select stocks for alpha, then you allocate funds to these stocks and the third is market timing. Basically, security selection, allocation and market timing. The Good Eye model takes care of these,” he says.

Taufiq, who is instantly recognisable by his wire-rim round glasses, is an avid reader who is sometimes seen as a “book nerd” by close friends and family members, while the bespectacled Siau is a “foodie” who travels the world for deals and good food.

While they continue to work on the PK Cypher US Fund, such as algorithm refinement and product distribution, each has other roles to play and passions to pursue as well.

For Taufiq, the Good Eye model has been a long time in the making, stretching back to as early as 2012 when he was an equity portfolio manager with Retirement Fund Inc (KWAP). He recalls being the principal officer of Prima Ekuiti (UK) Ltd, KWAP’s wholly-owned subsidiary in the UK, looking at thousands of stocks for investment ideas. That prompted him to develop a clearly defined investment thought process to select stocks with good potential.

It was not until 2024, when he was managing director of MBSB Bank that he assembled a small group of “young techies” during his free time and started explaining to them his thought process, which eventually led to the birth of the Good Eye model.

Initially, Taufiq wanted to monetise the model by selling it to brokerage firms, but was met with rejections. This prompted him to set up a proprietary fund and invest a few million ringgit in the model for live testing, which has turned out to be a success so far.

He also assumed the role of PPA’s CEO in October 2025, with the task of advancing the PRS industry by driving innovation and ensuring Malaysians are saving enough for retirement. One of his goals is to work with the Securities Commission Malaysia to expand the PRS eligible universe, to allow members to invest in other publicly listed instruments, such as ETFs and stocks in the future, and not just unit trust funds.

The bigger goal is to grow the assets under management (AUM) of PRS to RM10 billion by end-2026 from RM8.52 billion as at mid-2025. There were only about 645,000 PRS members at end-November last year, a far cry from the 16.5 million Employees Provident Fund (EPF) contributors.

Meanwhile, Siau, before venturing out on his own in Singapore, was best known for being the executive director and CEO of RHB Asset Management Pte Ltd who grew its AUM from US$1 billion to US$13 billion. He later co-founded Ericsenz Capital and invested in unicorns such as Uber, Spotify, Airbnb and Palantir.

It was in 2022 that he restarted Kairos Capital Group, which he had registered earlier, and dove deeper into the private markets. He had always been intrigued by their inner dealings and ended up finding himself mingling with start-up founders, many of whom were entrepreneurs, programmers and software engineers.

That year, Siau also followed his passion to launch the FoodTech Fund, securing a capital commitment of US$20 million from investors to deploy into several cell-based or cultivated food-related start-ups. They include Roslin Technologies, Mission Barns, GOOD Meat, Avant Meats and Future Meat.

Investing in start-ups is a high-stakes game, even more so when investing in futuristic products and solutions yet to be fully commercialised. The US Federal Reserve’s most aggressive interest rate hikes in decades, which burst the 2022 start-up bubble, made investing in start-ups more challenging.

Fast forward to today, Siau says UK-based Roslin Technologies was one of the best performers of the fund. The company that develops high-performance animal cell lines for the cultivated meat industry has continued to gain ground in the business-to-business segment. While not yet profitable, it has multinational corporations as its clients.

Mission Barns, another San Francisco-based start-up that specialises in cultivated animal fats, obtained FDA approval last year and has started selling its hybrid bacon and meatballs in Oakland, California, according to online information.

The California-based GOOD Meat, which received approval from the Singapore Food Agency in late 2021 to sell cultivated chicken products in the city state, underwent a restructuring process and shut down its Singapore operations to focus solely on the US market. The firm is a subsidiary of Eat Just, a San Francisco-based foodtech company known for its plant-based egg products.

Meanwhile, Israel-based Future Meat (rebranded as Believer Meats in 2022) and Hong Kong-based Avant Meats have ceased operations. The latter produced cell-cultivated fish and seafood.

Siau’s investment journey in the future of food has not been smooth, but investor appetite for cultivated food remains intact, partly due to heightened concerns surrounding food security. “I’ve just spoken to a few impact funds that are interested in food technology. There is still a lot of interest out there,” he says.

His conviction in food technology is partly reflected by the setting up of Kumo Omakase, a modern Japanese restaurant in Damansara Heights, Kuala Lumpur, with his partners. The kitchen is led by chef Sean Cheng, who brings experience from Singapore to the Malaysian dining scene.

Apart from serving an omakase experience with a contemporary twist, the venue could serve as a creative playground for cultivated food in the future.

“We have been talking to a few start-ups, including one from France that does cultivated foie gras. There are also cultivators in Japan and South Korea that do it for sea urchins. This could be a place for the private testing of these new products. That was the idea,” says Siau.

As for the PK Cypher US Fund, he says the team continues to test the Good Eye model in various markets, such as the UK, Hong Kong and China, and continuously refines it. The goal is to broaden the algo fund offerings beyond the US.

At the group level, Kairos Capital Group acquired Progress Asia Capital & Advisors Pte Ltd, a Singapore-based licensed asset manager, in 2024. The firm is in a transition phase where the existing leadership remains in place as it moves towards being fully institutionalised. “At a strategic level, the intent is straightforward, which is to establish a structured, licensed platform that allows us to operate both private and liquid market strategies in a consistent and scalable way,” says Siau.

He has several projects in the pipeline, but one of the most exciting ones is bringing the PK Cypher US Fund to Malaysian investors. He is in early-stage discussions with several potential local partners.

“Even though the fund is domiciled in Singapore, our motto is ‘by Malaysians, for Malaysians’. Malaysia has always been a key focus for us,” he says.

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