Challenge
As a newly launched asset management firm back in 2015, ITERAM started with proprietary analytical and operational tools and complemented them by partnering with an external provider. The challenges were:
- Diverse Asset Classes and Markets: the analytical tool must be capable of handling diverse financial instruments and provide insights across different regions and economies, suitable for a global investor.
- Multi-Currency Support: with a global investment universe, ITERAM needed the solution to accommodate different currencies and provide risk and portfolio analysis irrespective of the currency denomination.
- The need for a comprehensive and robust system that can meet the requirements of both the risk and investment management teams (peer grouping, scenario analysis, factor analysis, etc.)
Building models and reports in Excel is time-consuming and inconvenient. By contrast, Venn by Two Sigma offers a user-friendly interface compared to other risk portfolio management tools and can help tackle all of the challenges above. ITERAM appreciated the flexibility and ability to customize a variety of tasks to accelerate internal decision-making processes.
Solution:
ITERAM has partnered with Venn to help with several key workflows:
- Risk Management
- Portfolio Construction
- Ongoing Sourcing and Research
Risk Management
Venn aims to help produce a variety of risk metrics for both single line investments and on the whole portfolio level. The key metrics include risk attribution, correlation and factor attribution analysis. We also use Venn's stress testing capability to help navigate different challenging market scenarios.
Portfolio Construction
Venn has been instrumental in building and optimizing our portfolios. We typically integrate our CAPM assumptions to get forecasted returns and use optimization results as a due diligence tool for our strategic allocation changes.
Ongoing Sourcing and Research
Venn comes with an extensive database of funds and managers. The advanced filter can help us quickly build up peer groups according to different criteria, and generate analyses and tailor-made reports very effectively.
Results and What’s Next
As an asset manager specializing in investment solutions, it’s important to seek a solution that also integrates data for private markets activity. While established data vendors exist for private funds, ITERAM will find value to have all the data within one single database.
Venn is pleased to share this as a currently planned initiative and looks forward to further partnering with ITERAM.
Disclaimer: The Venn subscriber featured in this article was not compensated for their statements. As a Venn subscriber, their use of portfolio analytics or other Venn features and their experience could differ from your organization’s due to their particular use of Venn, the version of Venn used, or other factors. Not all subscribers will be equally satisfied. The person providing this testimonial was selected based on a variety of factors, some of which are subjective. This document is for informational purposes only. Not an offer to buy or sell securities. Click here for Important Disclosure and Disclaimer Information.
The information contained in this article is provided for general informational and educational purposes only, and should not be construed as investment advice. The contributor to this material is associated with a client of Two Sigma Investor Solutions, LP (“TSIS”). Neither TSIS nor its affiliates have compensated the contributor for his statements. The statements from the interview have been edited and reformatted by TSIS with the contributor’s approval. Unless otherwise noted, the contributor’s statements do not represent the actual views or opinions of TSIS or its affiliates, or any officers, directors, or employees thereof.
This article is not an endorsement by Two Sigma Investor Solutions, LP or any of its affiliates (collectively, “Two Sigma”) of the topics discussed. The views expressed above reflect those of the authors and are not necessarily the views of Two Sigma. This article (i) is only for informational and educational purposes, (ii) is not intended to provide, and should not be relied upon, for investment, accounting, legal or tax advice, and (iii) is not a recommendation as to any portfolio, allocation, strategy or investment. This article is not an offer to sell or the solicitation of an offer to buy any securities or other instruments. This article is current as of the date of issuance (or any earlier date as referenced herein) and is subject to change without notice. The analytics or other services available on Venn change frequently and the content of this article should be expected to become outdated and less accurate over time. Any statements regarding planned or future development efforts for our existing or new products or services are not intended to be a promise or guarantee of future availability of products, services, or features. Such statements merely reflect our current plans. They are not intended to indicate when or how particular features will be offered or at what price. These planned or future development efforts may change without notice. Two Sigma has no obligation to update the article nor does Two Sigma make any express or implied warranties or representations as to its completeness or accuracy. This material uses some trademarks owned by entities other than Two Sigma purely for identification and comment as fair nominative use. That use does not imply any association with or endorsement of the other company by Two Sigma, or vice versa. See the end of the document for other important disclaimers and disclosures. Click here for other important disclaimers and disclosures.
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