Product Frameworks

Our Product Frameworks are a novel suite of tools, techniques and services that enable customized, timely and transparent solutions to improve the performance and profitability of an asset manager's strategies and products. The following examples show how these Frameworks were used to envision new approaches to minimize implementation shortfalls.

I O T A™ (Investment Operations Transaction Analysis) enables investment managers to quantify Data Operability Thresholds [DOT] : a significant operational factor that correlates strongly with the performance of their strategies and portfolios. The underlying analytics measure and rank the causative agents that preclude the effective translation of investment ideas into expected results. Coupled with historical data from seven years of observations, we have packaged I O T A™ into the RiskForecast™ service (... visit the website) that clarifies how pre-emptive resolution of operational shortfalls can enable sustainable gains in performance ranging from 50 to 250 basis points.

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O R O™ (Operational Risk Offset) enables a bank's proprietary desk to offer cost-effective hedges for operational risk exposures stemming from securities and cash transactions undertaken by asset managers and hedge funds in the normal of course of business (eg, corporate actions not processed correctly by a fund's custodian). Though the financial impact per-incident may be relatively small, their cumulative effects are material.

Firms purchase options over-the-counter to offset peril-specific operational risk losses (in whole or in part). These options draw on a specialized portfolio created by the investment bank to expressly finance trading liabilities. This approach leverages contingent capital strategies in lieu of more costly traditional insurance, and provides asset managers with effective alternatives to minimize their working capital requirements.

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|||||    ContextMetrics™ Framework
     profile operational risks

ContextMetrics™ enables a global investment manager to generate predictive profiles (not just retrospective benchmarks) of operational risk exposures by counterparty. These risk profiles can be used to set fee structures and service level agreements with their global counterparties.

By analyzing the physical and temporal structure of securities and cash transactions that flow between it and its counterparties, ContextMetrics™ provided the insights for partitioning operational risk into individual components (eg, counterparty), each of which can be better understood and managed, either individually or as part of a broader portfolio of firm-wide risks.

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|||||    ContextStreams® Framework
     enhance market data utility

ContextStreams® enables a portfolio manager to significantly enhance the information value from existing data sources their firms subscribe to. ContextStreams® addresses the usability constraints inherent in these data sources, both syntactic (ie, formats) and semantic (ie, meanings), relative to the specific models and analytics that the manager relies on. By addressing these data limitations, a portfolio manager can better exploit ideas across the broader capital structure of investable companies.

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