London-based Derwent Capital Markets has launched its £25 million social media-focused hedge fund. The fund, domiciled in the Cayman Islands, will be Europe’s first to utilise sentiment derived from real-time social media data analysis.

Paul Hawtin, founder and fund manager, will manage a portfolio consisting of liquid equities and equity indices, utilising real-time sentiment analysis to provide what it hopes will be an invaluable insight into the “fear and greed” aspect within the financial markets. He comments: “For years investors have widely accepted that financial markets are driven by fear and greed but we’ve never before had the technology or data to be able to quantify human emotion. This is the 4th dimension. I’d like to take this opportunity to thank Reed Smith for all their help and support getting this fund up and running. Their team have been the backbone behind this venture and I must say I’ve been very happy with the service.”

Dale Gabbert, funds partner at Reed Smith, adds: “Social media is not just changing the way we live, it is now also changing the way we invest. We are delighted to have worked with Derwent on this groundbreaking fund. Given the fund’s use of social media data, we’ve worked closely with our market leading media group on IP issues and look forward to continuing our relationship with them.”

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