We were on a flight the other month and picked up Etihad’s in-flight magazine named Atlas. Aside from the usual 3D renders of one’s “dream apartment” with a token Arab standing next to an Italian sports car, we stumbled across a full page by Royal Vision Group (RVG). The advert for investment services promised that our “Intelligent Future Starts Here” and is shown in full below.

Several things raised an eyebrow or two. A 23% compounded return with a volatility of less than 3%?  This is performance that even the world’s top 1% of Hedge Funds can only dream of. Jim Simons eat your heart out. Alarm bells ringing, we read on.

The skeptical side of our brain began questioning. What was the time period over which the annualized return and volatility were measured? Was this track record audited? The icing on the cake were the words “driven by a unique Artificial Intelligence strategy” in the description of their strategy. Help us god.

Where was this Royal Vision Group based, and more importantly who were they regulated by? Abu Dhabi Global Market? DIFC ? the SCA? Given the lack of information on their advert they could just as easily be based outside of the UAE. What is certain, however, is that they made a public offer of an investment product with next to no credentials.

Considering all the above, we arrived at two likely paths such a business can take in life, that of either a “fraud” or “blow up”. Either way unlikely to end well.

We visited their website in search of more information. Instead we found another summary of performance that differed from the print advert we initially came across, again with no mention of the precise time period, or which exact product the performance related to.

The Sharpe ratio had dropped off considerably but the return and volatility still look too good to be true. Given a 20% return with a 3% volatility, the Sharpe ratio should be much higher. The math didn’t add up. Again, there was no mention whether this performance had been audited.

Further digging revealed there were two funds. The RVG Proprietary Fund and the RVG Intelligent Fund.

The Proprietary Fund (left) showed an incredible straight line of monthly performance over 3 years dating from July 2012 to December 2015. This must have been the performance related to their advert in Etihad’s Atlas magazine.

The Intelligent Fund performance (right) is published from April 2016 to April 2018 spanning just a 2 year period. Having been around the block a few times, we presumed the Proprietary Fund was some form of back-tested quantitative strategy. There was no mention of whether the Proprietary Fund traded a live environment with out-of-sample data, had its track record audited, or is still around today. Surely with such performance from the first fund, one would just continue the same strategy. From what we gather, the Intelligent Fund was likely the “live” version of this miracle strategy. Perhaps not surprisingly this fund produced much less impressive risk adjusted returns.

When broken down and analyzed, from inception to April 2018, the Intelligent Fund had a Compounded Annual Growth Rate (CAGR) of 9.5% and an annualized volatility of 14%. That puts its actual Sharpe ratio firmly below 1. Crudely speaking, this meant the fund produced less return on investment than the risk it actually took. This was a far cry from the 8.94 Sharpe ratio printed in the magazine, or even the near 2 Sharpe ratio referenced on their website. The real world had not been as kind to Royal Vision Group as MS Excel was.

Regulation & Compliance

A visit to the Legal Notice section of RVG’s website reveals there are several entities related to the group. The include a BVI entity and an entity named Royal Vision Capital (DIFC) Limited (RVC DIFC). As the name suggests, RVC DIFC was based in the DIFC and had been operating since 2015. RVC DIFC’s approved activity types are:

  • Management Consultancies
  • Investment in Commercial Enterprises & Management

Further down on the public register it explicitly states “Type of License : Unregulated”. To be clear, this means RVC DIFC was not licensed to manage funds or provide investment management services. This suggested that any asset management activity, including sales, taking place in the UAE were unregulated. You can check for yourself here.

The Team

So who was behind this investment company selling its products into the UAE? The directors and shareholders of the DIFC entity at least were Matjaz Zadravec, CEO and Stefan Frieb, CIO. Matjaz attended an event earlier this year named Private Investment Forum Wordwide, held at the Burj Al Arab where he apparently “introduced” their investment solutions to the audience.

He subsequently had a rather cringe-worthy if not plain weird interview with the host of the event.

We also found an interview with the CEO where he talks about how their “Two-Brain” AI system is destined to deliver “stable, positive and above average returns”. We’ll just see about that, it’s hard to label a strategy that can deliver -9% in a single month as being stable.


In summary, we pose the question, what are regulators doing when:

  • an investment product’s performance is publicly marketed in their jurisdiction without any reference to whether it has been audited or not.
  • an investment product is offered to the public in the regulator’s jurisdiction by an entity which doesn’t clearly state where it is domiciled or who it is regulated by.
  • an investment product is being offered to the public by an entity that appears to be misleading investors by having an affiliate of a similar name in the DIFC but which is not licensed to provide investment services to third parties.

Merely including the line “Exclusively offered to individual Professional Investors” in one’s advert surely can’t be enough to exempt a firm from such practices. We’ll continue to monitor Royal Vision Group’s performance and keep our readers informed with their “Intelligent” efforts.