Since its founding in 2001, Two Sigma has consistently sought to apply technology and the scientific method to find value in the world’s data. We’ve been fortunate to work with amazing investors that include some of the world’s largest public and corporate pension plans, sovereign wealth funds, insurance companies, research institutions, educational endowments, healthcare systems and foundations. We admire what they do. And we’ve been proud to help them do it, as a manager of a portion of their assets over the years.

 

Over the years, as our relationships with our investors developed, we encountered opportunities to consult with them on ways to apply a more systematic approach to their efforts to meet their overall investment objectives, outside of the portion of their assets we were trusted with directly. They wanted to understand the risk factors that existed in their portfolio and how market shocks might impact their performance. They wondered about how diversifying a new investment might be in the context of their existing portfolio, or whether a manager was providing idiosyncratic returns vs. more commonly available beta exposure in a historic bull market in equities. If 2008 repeated, how would they fare?

 

In the process of working on these analyses, we observed a notable gap between the tools we had developed and applied to improve our research, portfolio construction and risk management processes and those that our investors relied on or had access to in their asset allocation roles.

 

These investors faced challenges corralling investment data. In some cases, while tasked with overseeing billions of dollars across hundreds of managers and investments, they relied on shared drives or antiquated databases to keep track of holdings. They manually maintained Excel files to run static risk and performance reports and prepare for committee meetings and investment presentations. 

 

We saw an opportunity to bring technology and data science to help with these issues.

 

So in early 2017 we privately announced Venn, a portfolio and investment analysis platform that we began by offering exclusively to our investors. True to the scientific method that guides us as a firm, we wanted to test, learn and iterate on our hypothesis that institutional investors were under-served by tools in the market. By applying the lessons we learned developing our own investment platforms, we offered a SaaS application that delivered instant access to factor analysis, risk attribution and asset allocation tools and invited them to give it a try.

 

Nearly 3 years later, we’ve seen over 200 institutions sign up for Venn, representing over $5T in combined assets. These investors have used Venn to help their investment analysis and due diligence, portfolio construction, scenario analysis and asset allocation optimization. They include endowments, pensions, medical research institutions and insurance providers, among others.

 

Having observed firsthand the impact Venn has had on these subscribers, we decided that the broader community of institutional investors, wealth managers, and others should have access to Venn’s capabilities, as they try to meet their investment objectives and manage the assets of thousands of additional inspiring organizations and retirees. So, today we’re excited to formally announce the launch of Venn. I encourage you to explore how Venn can help you and your investment team by signing up here. We’re constantly refining the product and are overwhelmingly driven by an ever-evolving understanding of our clients’ challenges and needs. We would love your feedback.

 

For those interested in learning more about Venn’s approach to analysis and the types of investor challenges Venn seeks to address, take a look at some of our latest content on the VennSights blog and subscribe to be added to our distribution list to stay up with the latest product announcements and updates.

 

We’re excited to partner with you to help bring greater intelligence to your investment process.

Read the official press release here.

 

REFERENCES

1 AUM is obtained from public sources and represents the estimated assets managed by Venn’s subscribers.

 

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.  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. Click here for other important disclaimers and disclosures.

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