Stefan Buck will perform with the band Hecht at Switzerland's biggest festivals this summer and is at home on both the musical and banking stage. finews.asia talked to him about his new fintech venture, the hassle of creativity, and nasty mail about Credit Suisse.

Mr. Buck, as the lead singer of the band Hecht that sings its lyrics in dialect, you have given many interviews...

But never one like this where the topic is that I do something else besides Hecht! I kept the two worlds strictly separate for a long time.

Why?

I was in finance all day and didn't tell anyone that I was still doing music. I wanted to be taken seriously in my job, and I thought if I tell them I'm also a singer, they'll wonder if I know what I'm doing. But I studied finance and know enough about the subject. Only over time did I learn that people are very good at separating one thing from another.

Their thinking has come around.

But when I go to introduce Adaptivv, the new company I'm involved with, it still doesn't occur to me to say: Hello, I'm Stefan Buck from Hecht!

What I have to ask the musician and fintech entrepreneur Stefan Buck is how many hours does your day have?

24 hours just like everyone else. But I organize myself in such a way that I hopefully manage my time as efficiently as possible and get everything under one roof: the family, but also the job and the hobby.

With Hecht's music, there's no longer any question of a hobby. The band has filled Zurich's Hallenstadion. This summer you will play at the big Swiss open-air festivals.

I say hobby because the financial reality had been for a very long time the income generated by it was that of a hobby.

«Of course, I am under power!»

We didn't make music on the side because we felt that was particularly cool. Without a breadwinning job, a family simply wouldn't have been possible. It's only in the past two years that things have changed in terms of the band's income. This allows us to allocate more time here.

Does the success of Hecht offer you the chance to devote yourself entirely to your passion for music?

I also like to do other things very much. It doesn't happen to me that I get up in the morning and think: now I'd rather pick up the guitar, and then I go to the office anyway. I appreciate both the analytical aspect of my job and the creative aspect of songwriting, where you try out 1,000 ideas to make one work in the end. The gigs with the band are more of a delivery for me. In this respect, during a phase of live performances, there is more time for the job.

Watching your live performances, one would think that you are quite electrified on stage. But actually, you're just delivering songs?

Of course, I'm under power! But everyone in our band doesn't look at performing as work, but as a reward for all the songs we've recorded, the photo shoots we've done, the interviews we've given...

...but not the last!

The reward is the energy you soak up from the audience. After a weekend with two concerts, I'm physically exhausted, but fully refueled with energy. When 10,000 people in the audience sing along, you get an extremely high return for your efforts. In my opinion, the most exhausting thing in the creative field is to create something new. Sometimes I have to conclude after ten hours in the rehearsal room that nothing has come of it at all.

Can you take the energy from your performances over to your job? To business?

It's funny to ask that, and I can confirm it, but the whole thing works both ways for me. Sometimes it's the case that things go better in the job than in the music. And then it's the other way around again.

Things are going like clockwork for Hecht right now. As a Swiss dialect band, is there anything else you want to achieve?

For me, music is not about bigger, faster, more profitable. We're not going to take Hecht public.

But?

I want to meet my best friends and make music with them. Or write songs that touch people.

«With Hecht, it took us nine years to go from an audience of 20 to the Hallenstadion»

You never get done with that. If, on the other hand, we were to set out to fill even bigger stadiums, that would be dangerous for the band. We would risk losing the desire to play music. But what I can promise is there will be a new album, and I'm looking forward to playing it in front of as many people as possible.

What's it like in business to leap your new engagement at Zurich-based fintech Adaptivv?

You'll never be done with that. If, on the other hand, we were to set out to fill even bigger stadiums, that would be dangerous for the band. We would risk losing the desire to play music. But what I can promise is there will be a new album, and I'm looking forward to playing it in front of as many people as possible.

And what's it all about in business to leap your new engagement at Zurich-based fintech Adaptivv?

Whether it's in music or finance, I like to create new things. At Adaptivv, I have the chance to work on products that I would like to invest in myself and haven't seen anywhere else. That's where I draw inspiration from. With Hecht, it took us nine years to go from an audience of 20 to the Hallenstadion. Who knows how long it will take to reach the masses with Adaptivv. The main thing is that I'm getting there with cool people.

Bankers are cool?

That's often underestimated from the outside. People assume they are suits who want to make a lot of money first. But there are so many good people in the industry with whom you like to get creative.

Where will you be with Adaptivv in nine years?

I hope we can establish a new style of investing and add value. We are striving to provide users with a kind of investing autopilot. This should prevent them from experiencing big crises in the stock market.

«We want to promote adaptive investing»

I'm all for passive investing with index products. But the problem is that investors fully participate in every crash. And once they're down 30 percent, they get nervous and sell, and maybe at the worst possible moment. That doesn't have to be the case. I want to be able to go to bed without the fear of further losses keeping me awake through the night.

With respect, there is no return without risk.

True, it would be extremely dubious to advertise it that way. But anyone who bought a conservative portfolio from the bank after the 2008 financial crisis missed out on the best part of a bull market for over ten years. Those who chose an aggressive style suffered badly from interim book losses for the past two years. We want to advocate adaptive investing: Take more risk when the market is calm, and gradually take out risk when things get turbulent. That this will cost something is as clear as day. But we hope to use our technology to reduce costs and maximize returns.

You still have to prove that.

The quant model my colleagues at Adaptivv and ETH developed has been around for six and a half years. It's already in use with institutional clients and has also been subjected to a scientific peer review process. It's clear to me that we still have to provide longer-term proof. We also need to convince private banks and family offices of the model's value.

Does Adaptivv also want to target retail clients?

Absolutely. We'll launch investable products approved for public distribution, so private investors can also use them. I want to invest in my solution.

To do that, you will need big partners.

Correct. Adaptivv has the technology, and I bring the sales contacts. We're in the process of establishing these partnerships, Preferably with established companies taking the long view and understanding it takes at least nine years to arrive at the Hallenstadion.

Adaptivv has gamed out whether investors would have escaped the crash of Credit Suisse's stock using the algorithm. The Adaptivv model says it would have sold the stock for 8 francs after last March's takeover by UBS, the stock is now worth just under 80 centimes in trading.

That was one-to-one what the signal told us. I also received some nasty comments in response to the post. But the action was in no way directed against Credit Suisse.

«In this industry, what counts, in the end, is how much wealth you are able to attract»

We simply wanted to show the advantages of an unemotional investing approach. Everyone had an opinion about Credit Suisse at the time. But when the price of a stock becomes so unstable, the obvious conclusion is that you shouldn't be there any longer. Our algorithm measures precisely this instability or rather the stability of the share price.

Isn't that just another form of opinion?

An opinion is always a look into the crystal ball and the algorithm only looks at the present and draws its conclusions from it. A nowcast instead of a forecast, if you will.

After this experiment, your customers should have been banging on your doors, shouldn't they?

Many people find this exciting. They say to themselves: I'm happy when I can test my opinion against quantitative input that tells me as hard as nails that I should get out of Credit Suisse. But clearly, we're still in the very early days with Adaptivv, despite the positive feedback. In this industry, what counts, in the end, is how much wealth you're able to attract with an offering. That's why we remain cautious about spending. We have rented a cheap office and aren't hiring 50 people on the fly now.

The fintech boom has faded in Switzerland. Has it become harder to make such a company big?

Perhaps the fantasy surrounding fintech is no longer as great as it was in 2015, but it was true then, as it is now, that too little attention was paid to distribution. This is something that was understood early on at derivatives specialist Leonteq, for which I continue to work.

«The goal is not a nirvana that must be built at all costs»

Leonteq may be a fintech, but it built an incredibly strong sales force from the start. Technology can help with scaling, but distribution is one of the factors that ultimately determine commercial success.

After all, Leonteq hasn't only had stellar years...

That may be. My seven years at Leonteq so far have been a fun journey for me, where we have been able to build things together. That remains. Now at Adaptivv, we're not saying we're the new superstar fintech, but I think we have very strong technology, and now we have to make sure that others see it that way.

How is the company financed?

All capital comes from us. At a suitable time, we will look for partners. But first, we have to prove that we can attract assets. Then we will also become exciting for investors.

One gets the impression from you that in the financial world as in music, the journey is the destination. Is that accurate?

The goal is important for staying ambitious, but not a nirvana that has to be achieved. For me, the much more decisive question is: Did I have a good time on the way there? Just as with music, I want to be able to look back one day at my new startup venture and say, Hey, we went full throttle. But most of all, we enjoyed our time together. However, if I knew the next eight years were going to be hell, I wouldn't do that to myself. Life is too short for that.

Stefan Buck is a Managing Partner at derivatives specialist Leonteq and has been a partner at Zurich-based fintech Adaptivv since March. Away from the world of finance, the 42-year-old is known as the frontman of the highly successful band Hecht that sings in dialect. Adaptivv was founded in 2016 by Tobias Setz and Felix Fernandez under the name Openmetrics Solutions as an ETH spinoff. The technology is used in risk management and portfolio modeling by Swiss pension funds, family offices, and banks, with expansion plans. Recently, the startup came under the regulatory auspices of the Swiss Financial Market Supervisory Authority (Finma).