Manifesto articulates need for change in front-office portfolio management technologies driven by cloud-based technologies, market demands
Today at the 2011 Morningstar Investment Conference, portfolio data and analytics leader StatPro Inc. has announced the availability of “Why a Revolution in Front Office Portfolio Analytics and Reporting is Needed”, a new “red” paper that calls for a revolution to make front-office portfolio analytics technologies smarter, faster and easier to use by replacing traditional, terminal-based systems with cloud-based platforms, simple reporting and always-on, user friendly interfaces.
The red paper, so named in contrast to conventional white papers, supports StatPro’s launch of Revolution, a web-based portfolio data and analytics platform that is priced on a $100 per-portfolio basis, with no installed software or hardware and a highly intuitive design. The platform gives portfolio managers always-on access to portfolio performance data and allows fast, easy and highly visual reporting to both internal asset management staff and external clients.
”Why a Revolution in Front Office Portfolio Analytics and Reporting is Needed” is available through the StatPro website and for a limited time in hard copy at the StatPro’s Booth #161 at the Morningstar Conference in Chicago. The red paper addresses key industry concerns about front-office portfolio analytics, performance and attribution analysis
Terminal or web? – how asset managers can weigh the merits of traditional front-office tools vs. web-based systems, including security concerns, costs and maintenance requirements
• Making friends with the back office – how portfolio managers can make the most of technologies that enable consistent reporting of pricing and risk data from the front office, through the middle office and the back office
• It’s all about the clients – why investors care about the kind of instant, transparent and easy-to-understand reporting capabilities that come with a web-based portfolio analytics system
“The velocity of market change has forced portfolio managers to rethink the tools they have at their disposal for managing analytics and data related to their clients’ investments,” notes StatPro North American CEO Andrew Peddar. “Observing the rise in cloud-based and SaaS technologies and increased expectations for an always-on experience across all sectors, we’ve made the strategic decision to create and deliver an innovative new solution, Revolution. Through ”Why a Revolution in Front Office Portfolio Analytics and Reporting is Needed”, we aim to help educate the asset management market about both the market factors and the technology advantages of moving to a web-based platform.”
StatPro is a global provider of portfolio analysis, asset valuation and reporting solutions. StatPro offers a SaaS-based analytics and data platform to investment management companies and those who serve them providing sophisticated portfolio performance analysis, attribution, risk and GIPS® compliance. The company has leveraged 15 years of experience to develop and launch StatPro Revolution – cloud based portfolio management software that performs sophisticated analysis, reporting and distribution. Available anywhere, StatPro Revolution combines best of breed analysis with leading technology to create a powerful, cost-effective web based platform. StatPro has operations in Europe, North America, South Africa and Australia and now has more than 250 clients in 25 countries around the world. For more information on StatPro, please visit our website at http://www.statpro.com
StatPro Group, a leading provider of portfolio analysis and asset valuation services for the global investment management industry, today announced that it has signed new multi-year contracts with several customers in North America, Europe and Asia. The new customer contracts include a variety of StatPro products, including the StatPro Seven portfolio analytics platform and the company’s evaluated pricing services.
The contracts were signed with TCW, State Street Global Advisors, Indus Capital Management, PIMCO, Horizon Asset Management and BofA Merrill Lynch in North America; Adepa, Banco Finat, Bank of Ireland, Barclays Capital, CACEIS, NGAI, Polar Capital, SIA SSB, Royal Mail, River and Mercantile Asset Management and Liverpool Victoria Asset Management in Europe; Nedbank in Africa and a major asset manager in Singapore. These contracts support StatPro’s business objectives for the year and add to the Group’s high levels of recurring revenue under contract.
“StatPro’s integrated product strategy and SaaS delivery model offers a wide range of functionality to help customers meet the ongoing challenges of portfolio analysis,” said Mark Bramley, CEO of StatPro North America. “Our SaaS model allows customers to benefit from faster, easier system updates, improved service and reduced costs.”
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StatPro is a leading provider of portfolio analysis and asset valuation services for the global asset management industry. The company sells a SaaS-based analytics and data platform on a rental basis to investment management companies allowing them to analyze portfolio performance, attribution, risk and GIPS® compliance. StatPro also provides an asset pricing service including a service to price complex assets and valuation feeds.
For more information on StatPro, please visit http://www.statpro.com
StatPro Group plc, a global provider of portfolio analysis and asset valuation services for investment professionals, has appointed Ruggero Frisina as European Sales Director.
Commenting on the appointment, CEO of StatPro Group plc Justin Wheatley said: “With the launch of StatPro Seven this year and that of Revolution in 2011, we wanted to bolster our European sales force. StatPro is considerably expanding its client base to cover asset management entities of all sizes, with StatPro Seven focussing on performance specialists in the middle office and Revolution on front office professionals. StatPro Revolution will be accessible for a wide audience as it is priced from $100 per portfolio per month, providing outstanding monetary value for small, medium and large asset managers alike. Frisina has been appointed to head the sales initiative and will manage our business development team across Europe. We are delighted to have him on board.”
Prior to joining StatPro, Frisina worked for four and a half years at RiskMetrics. He also spent a year and a half at Citigroup Asset Management and was at BNP Paribas for three years.
“I am joining StatPro at a particularly exciting time as it is simultaneously expanding its product offering and client base. StatPro has a long track record of offering state-of-the-art portfolio analysis products and risk management software solutions to the asset management industry. I am looking forward to promoting StatPro Seven and Revolution and expanding StatPro’s client base in Europe,” said Frisina.
For further information please contact:
Jeanine Leuckel, StatPro
Tel: 020 8410 8655
Fabienne Pasquion, Ascension Consulting
Tel: 020 7100 6111 / 07984 119846
Notes to Editors
Justin Wheatley is available for interview upon request.
StatPro Group is a leading global provider of portfolio analysis and pricing services for the worldwide investment community. Founded in 1994, StatPro offers portfolio analytics software combined with pre-packaged evaluation services using a Software as a Service (SaaS) platform. The company’s integrated solutions provide performance measurement, liquidity risk measurement, attribution analysis, risk management, governance, compliance and reporting – all in a single interface. More than 250 major asset managers worldwide utilize StatPro solutions.
Read more on: www.statpro.com
London, 5 October 2010 – StatPro Group plc, a leading provider of portfolio analytics and asset pricing services for the global investment management industry, is pleased to announce that StatPro Revolution, a Software as a Service solution in its pilot phase, has been given a major boost by the news that a global custodian bank has just contracted to integrate its client data with Revolution, following a successful feasibility study.
Revolution is an online portfolio analysis service offering performance, attribution, risk and reporting for portfolio managers all around the world, but at a fraction of the price of traditional software only solutions.
The custodian aims to offer all of its own clients easy access to the most sophisticated portfolio analysis and reporting using Revolution. The technology used means that integration can happen in a matter of months, so the benefits will be available to all of the custodian’s clients from the New Year – thus giving them a significant commercial advantage over their competitors.
Today’s launch of phase two of the public beta enables trial account users to upload holdings files to the system within seconds. There is also a new dashboard perspective, where users can see a complete picture of their portfolio asset allocation, risk performance and attribution at a glance. Clients can also produce stunning reports of detailed analysis in a variety of formats in seconds, dramatically reducing production times.
“For the first time asset managers or pension funds can gain access to the most sophisticated analysis from as little as $100 per month. Technology that used to cost hundreds of thousands of dollars or more is now available to all professionals,” said Justin Wheatley, CEO of StatPro Group plc. “This will create a level playing field and allow nimble smaller players to show off how they can add value to their clients. For the bigger players, Revolution will enable them to disseminate information efficiently and cost effectively to all their staff – improving communication and transparency.”
Software as a Service technologies are transforming whole sectors across the business world and portfolio analytics is no exception. StatPro is the first company to offer a genuine SaaS solution that integrates data and software as a service for portfolio analysis. StatPro Revolution is an open platform with a toolkit for integration with third party solutions. The key objective is to offer an outstanding service and equal service to fund managers of all sizes at affordable prices.
For $100 per portfolio per month, Revolution includes risk management software, attribution, performance and reporting as well as unrestricted access to StatPro’s data universe of more than 500,000 securities and 9000 benchmarks. This fee also includes access to an unlimited amount of report generation and unlimited amount of data imports.
To see StatPro Revolution and to sign up for a free trial account go to http://www.statpro.com
StatPro is a leading provider of portfolio analytics and data solutions for the global asset management industry. The Company sells a SaaS-based Analytics and Data platform on a rental basis to investment management companies allowing them to analyse portfolio performance, attribution, risk and GIPS® compliance. StatPro also provides market data and valuation feeds including a complex asset pricing service.
For further information please contact:
Jeanine Leuckel, StatPro
Tel: 020 8410 8655
Fabienne Pasquion, Ascension Consulting
Tel: 020 7100 6111 / 07984 119846
Technology is going to change portfolio analysis over the next few years in a number of ways.
At the moment portfolio analysis is reserved for the few, the specialists. So much work goes into preparing the data that by the time other people get access to the results it is usually out of date, and because it has been prepared by specialists it is often incomprehensible anyway. This leads to the question “What is portfolio analysis used for in any case?” If it takes so long to generate and the output reads like Chinese what is the point?
Portfolio analysis is incredibly useful and important, but should be more open, simpler and up to date. Portfolio analysis reveals the quality of work of the person looking after your money. It shows whether they are being careful with it or just collecting a fee for neglect. It can help explain how a manager reacts to a crisis; with panic or intelligence. It can reveal whether the person entrusted with your hard earned cash has listened to you about your appetite for risk, great or small. Portfolio analysis is the means by which the manager communicates with his client and explains what he has done with the investment and why. A good manager has no fear of portfolio analysis because, whether the performance looks good or bad, he can demonstrate the intent and the strategy behind each decision. The poor manager will soon reveal himself with contradictions and has much to worry about with accurate portfolio analysis in place.
There is indeed a great demand for portfolio analysis solutions, and it is technology that helps to bring users and solutions together. Although the Dot Com era started back in the 90’s it has taken 10 years for the infrastructure of the internet to really develop. These days, the telecoms connections and the computing power of the clouds mean that vast parallel processing “farms” of computers can now be brought to bear to help speed up portfolio analysis. Portfolio analysis requires an incredible number of calculations and there are millions of portfolios in the world. The way things are currently set up, each asset management company operates in splendid isolation, each duplicating the work of the others. This means that few have any economies of scale and those that do generally have higher priorities. Technology means that soon these companies (especially the smaller ones) will be able to leverage the power and potential of cloud based portfolio analysis like we leverage the electricity supply of our utility provider rather than putting more gas in our own generator.
This will bring down the cost of portfolio analysis massively and also make it far more immediate. Because it is all web based, anyone can access it if they have a browser, so there is no need for expensive deployment of software. This will mean that managers can make the portfolio analysis directly available to their clients. Such transparency will win them more business. With clients more engaged in the investment process, they will understand better what the “Chinese” of the portfolio analysis actually means, and that will create demand for more precision.
Cloud computing has changed social behaviour with sites like Facebook and Twitter, the same effects will happen in other walks of life, and portfolio analysis is no exception.
StatPro Group is a leading provider of portfolio analysis and asset valuation services for the global investment community. Founded in 1994, StatPro offers online portfolio analysis combined with pre-packaged evaluation services using a Software as a Service (SaaS) platform. StatPro Revolution – the company’s integrated portfolio analysis and risk management software solution – provides performance measurement, attribution analysis, governance, compliance and reporting – all in a single interface.
StatPro, Inc., a global provider of portfolio analysis software and asset valuations, today announced that it will become the primary independent provider of evaluated pricing for BofA Merrill Lynch Global Research Bond Indices for Canada, Mexico and Brazil.
StatPro’s fixed income methodologies incorporate bond terms and conditions, proprietary pricing models and real-time quotes from contributing dealers. StatPro uses fair market value assessments in accordance with accounting guidelines such as FAS 157 to provide valuations consistent with industry standards.
“We are very pleased with BofA Merrill Lynch Global Research’s decision to use StatPro as the primary price provider for Canada, Mexico and Brazil. Our independent valuations will provide the on-demand delivery and transparency needed to meet investor requirements,” said Mark Bramley, CEO of StatPro North America. “We believe that BofA Merrill Lynch Global Research will benefit not only from our superior fixed income valuation service but also from our commitment to providing excellent customer care.”
StatPro Inc. is a leading global provider of asset management software for the worldwide investment community. Founded in 1994, StatPro offers portfolio analysis software combined with pre-packaged evaluation service using the Software as a Service (SaaS) platform. StatPro’s Unlimited Pricing service incorporates reference data, corporate actions and industry classification codes, asset pricing, bond pricing and an index data service. The company’s integrated analytics solutions provide performance measurement, attribution analysis, risk management software, governance, compliance and reporting – all in a single interface. More than 250 major asset managers worldwide utilize StatPro solutions. StatPro Inc. is headquartered in Boston and is a division of StatPro Group PLC (AIM: SOG).
Regulation has been the key driver in establishing firm-wide risk management operations among the European buy-side industry. UCITS III has increased the role of middle office and has driven a flurry of new investments in risk management: in people, software and data services.
UCITS III has borrowed the notion of VaR from the sell-side industry and has introduced it in the asset management world where VaR was not at all central. UCITS III introduced in 2004 a distinction between Sophisticated and Non-Sophisticated funds and prescribed that the former use a VaR approach to risk management. The Non-Sophisticated funds were instead allowed to stick to the traditional “commitment” approach, measuring the exposure of the fund and controlling that the exposure is not higher than the double of the fund’s NAV.
This distinction has been often used as a back-door to escape regulation avoiding the use of VaR and the prescriptions associated to it. An enlightening example lies in the many monetary funds that were heavily invested in ABSs: how many of those funds were declaring themselves as “Sophisticated” funds? Probably none of them as the “Monetary” classification clashes with the notion of sophistication. Unfortunately, we have all discovered at our expenses that ABSs were not a simple financial instrument.
However, the events of the credit crisis have pushed the European regulator to reconsider part of the regulation framework and enrich it. The UCITS IV Directive is expected to be voted on July 2010 and become effective at the beginning of 2011. This directive will drive all the investments in risk management in the buy-side industry in the coming years and will even have an impact on the hedge fund industry, as many hedge funds are creating UCITS vehicle to expand their commercial reach, benefiting of the regulation flexibility on leverage.
It is therefore important to highlight what parts of the coming regulation will impact future investments on risk management and pricing.
Sophisticated/Non-Sophisticated. The distinction will be abandoned and all UCITS will need to have a risk management process in place. UCITS will still be able to choose between commitment and VaR approach, but as the commitment approach becomes substantially more complex, the consensus seems to be that all the industry will move towards a VaR approach. Asset managers that today use only commitment approach will probably need to invest in VaR-based processes.
Mandatory Model Back-Testing. Model back-testing was a prescription only in some of the EU members. It will be extended to all Nations.
Liquidity Risk. This is the most important new prescription. The regulator will ask for a dedicated liquidity risk management process and for stress tests and scenario analysis on market liquidity risk. This prescription stems directly from the serious liquidity restrictions experienced by many monetary funds during the crisis.
Two Sources of Evaluation. While UCITS III already asks to have an independent source of evaluation in addition to the broker’s quote for OTC derivatives, UCITS IV will extend the requirement to bonds that embed derivative pay-offs.
Consistency of Risk Management and Pricing. Another innovative prescription requires that the methodologies used for risk management and pricing are consistent. This does not mean necessarily that UCITS will need to use the same system for risk management and pricing, but simply that the models and methods used need to be compatible and built on similar grounds.
These prescriptions will drive the next investments in risk management and valuation and will further strengthen the middle office practices inside UCITS.
StatPro is a leading global provider of portfolio analytics, data solutions, asset pricing services and risk management software for the worldwide investment community. Founded in 1994, StatPro offers portfolio analysis software combined with pre-packaged evaluation services using the Software as a Service (SaaS) platform. The company’s integrated solutions provide performance measurement, attribution analysis, risk management, governance, compliance and reporting – all in a single interface.
The credit crisis has been accompanied by a contextual reduction of liquidity in all asset classes. For certain asset classes like ABSs liquidity has entirely disappeared, but even for popular instruments like convertible bonds and corporate bonds the destruction of market depth has been severe.
The loss of liquidity was not contemplated at all in the risk management models used across the industry, with the consequent increase of model back-testing failures. To give an idea of the impact of the liquidity component in these failures, we have observed in convertible bond portfolios three times the failures experienced by equivalent equity portfolios. The differential was entirely explained by the loss of liquidity in the convertible bond market, a market dominated by hedge funds that had to de-leverage their portfolios suddenly and all at once.
The combination of these events and the discovery that many monetary funds were investing relevant portions of their assets into illiquid instruments, such as ABSs, has increased the focus of regulators on Liquidity Risk.
Where the asset management industry is concerned, the most evident outcome of this new focus is reflected into the recent CESR recommendation for UCITS IV regulation (CESR/09-963, 28 October 2009). In this paper the CESR recommends the introduction of an ad hoc liquidity risk management process. Liquidity risk must be “…appropriately assessed, managed and monitored overtime” for all the UCITS.
The recommended prescription is reinforced by the following article, where the regulator requires that management companies perform stress tests and scenario analyses to measure the impact of potential liquidity crises, similarly to what is done under current legislation for stress tests on market risks.
The introduction of Liquidity Risk is the biggest surprise of UCITS IV according to many practitioners, even if this recommendation has been preceded by similar initiatives by the FSA in the banking regulation and by the Italian Consob for illiquid instruments marketed to individuals, under the MIFID hat.
The surprise comes along with worries and unresolved questions on the implementation of these new rules and liquidity risk procedures. Market Liquidity Risk is still a gray area in the risk management research. In the remainder of the article we try to define market liquidity risk, explain where the implementation problems come from and propose a possible solution.
Market Liquidity Risk is the risk of losing a certain amount of money when we liquidate the positions held in a portfolio/fund. Assume for a moment that we can observe bid and asks for all the instruments that we hold in our portfolio, and that the size of these proposals is consistent with the quantities that we hold. Assume also that we are revaluing our portfolio using mid prices.
In this case the market liquidity risk is simply the cost of liquidating our portfolio at the observed bids (and asks for short positions), as measured by the distance between mid price and bid (or ask).
It may be easy to compute this loss for an equity portfolio, where bid/asks and volumes are available, both in normal and stressed times. It becomes much tougher to follow this approach when the assets held in the portfolio are bonds, illiquid bonds, OTC derivatives and the plethora of opaque financial instruments that can be found in abundance in many mutual funds.
We call this the Liquidity Risk Paradox: the information for calibrating liquidity risk models is available only for liquid instruments. In other words, we will never find the data that we need on illiquid instruments, where most of the Liquidity Risk actually lies.
For a long time it seemed that the problem did not have a solution and this explains in part why the risk management industry has never implemented a universal solution for measuring and managing market liquidity risk across all financial instruments, from equities to OTC derivatives, to illiquid bonds.
However, current technology and availability of data allows imagining new solutions. We have recently finalized one year of research and development for developing a new approach to liquidity risk.
The approach replicates the way market makers create the bid and ask of an illiquid product: they introduce in the pricing function of an instrument the bid and ask of the OTC derivatives that will be used to hedge the position, obtaining the equivalent bid/ask of the instrument.
The approach can be used for any financial instrument that links a pricing function to traded OTC derivatives, enlarging dramatically the set of instruments for which Liquidity Risk is computable, including opaque assets for which no price and volume information is available.
Dario Cintioli wrote this article on 03-12-2009, he is the Global Head of Risk Management and Complex Pricing at StatPro, a leading provider of portfolio analytics, data solutions, asset pricing services and risk management software for the global asset management industry.
London, 17 May 2010 – StatPro Group plc, a leading provider of portfolio analysis and asset evaluation services for the global asset management industry, today announces that Adepa Asset Management in Luxembourg has signed a contract for components of Seven, StatPro’s new SaaS system aimed at performance and risk specialists in large asset managers.
Adepa is the leading Spanish provider in Luxembourg of asset management, fund administration and corporate services for investment funds addressed to institutional clients, professional investors and high net worth individuals around the world.
StatPro provides Adepa with portfolio compliance, risk and data management services, within a hosted environment. StatPro Seven combines zero IT footprint with full data management and automatic upgrades.
“This agreement is our first deal for StatPro Seven in Luxembourg and we are really excited about that,” said Justin Wheatley, StatPro Group’s CEO. “In a tough regulatory climate such as this, it is crucial for asset management companies to choose a scalable and reliable solution to help support growth in their business. A hosted solution such as StatPro Seven means that implementation is fast and cheap, and maintenance for the client is minimal.”
Carlos Alberto Morales, Managing Director at Adepa Asset Management and Alex Bardaji, Head of Risk & Compliance at Adepa Asset Management:
“StatPro was able to offer an impressive and cost-effective outsourced response to our problem, enabling us to concentrate on what we do best – managing portfolios and controlling risks. We are now benefiting from StatPro’s compliance, risk and data management components, which among other things will help us to meet the requirements of Ucits IV.”
For further information please contact:
Tel: 020 8410 8655
Tel: 020 7100 6111 / 07984 119846
StatPro is a leading provider of portfolio analysis and asset valuation services for the global asset management industry. The company sells a SaaS-based analytics and data platform on a rental basis to investment management companies allowing them to analyse portfolio performance, attribution, risk and GIPS® compliance. StatPro also provides market data and valuation feeds including a Complex Asset Pricing service. For more information on StatPro, please visit our website at www.statpro.com
Founded in 1980, Adepa provides asset management, fund services, private equity and corporate services to a broad range of European entities. It is part of the Sebroker group (a member of the Madrid, Barcelona, Paris, Brussels, Lisbon, Amsterdam, Frankfurt and Milan stock exchanges).
Company adds proven sales leaders to meet rising customer demand for SaaS-based financial analytics solution
BOSTON – May 5, 2010 – StatPro Inc., a global provider of portfolio analysis and asset valuation software for investment professionals, today announced the expansion of its North American sales team with the addition of Holli McCaffery and David Meister. Both McCaffery and Meister bring years of finance and technology experience to StatPro from leading companies such as Morningstar, Thomson Reuters and Globalcom.
Holli McCaffery joins StatPro as a business development manager focused on expanding the company’s customer base and generating sales of StatPro’s portfolio analysis solutions. Prior to joining StatPro, McCaffery served as vice president of sales for Binary Investment Research, and worked as an account executive and senior relationship manager for Thomson Reuters. She holds a B.A. in Economics from the University of New Hampshire.
David Meister also joins StatPro as a business development manager with a focus on new customer development. Prior to joining StatPro, Meister served as business development associate, account executive and account manager for Morningstar, where he worked with customers in banking, mutual funds and pension funds in both the U.S. and Canada. He also served as an account executive with Globalcom in Chicago. Meister holds a B.A. in History from the University of Illinois.
The StatPro platform is a Software-as-a-Service (SaaS)-based solution that integrates portfolio analysis with market, classification and index data. It enables easy access to performance measurement, attribution analysis, risk management, governance, compliance reporting and more – all from a single interface.
“Holli and David both have successful track records as sales professionals in the financial industry,” said Simon Stillwell, Director of Sales for StatPro North America. “Their finance experience, technical knowledge and industry contacts make them an ideal fit for executing our vision to deliver SaaS-based solutions to customers throughout the U.S.”
For more information, visit www.statpro.com or contact us at email@example.com or (001) (617) 692-1150.
StatPro Inc. is a leading global provider of asset management software for the worldwide investment community. Founded in 1994, StatPro offers asset valuation and portfolio analytics software combined with pre-packaged evaluation services using the Software as a Service (SaaS) platform. The company’s integrated solutions provide performance measurement, attribution analysis, risk management software, governance, compliance and reporting – all in a single interface. More than 250 major asset managers worldwide utilize StatPro solutions. StatPro Inc. is headquartered in Boston and is a division of StatPro Group PLC (AIM: SOG).
For further information please contact:
Davies Murphy Group, Inc.