Laurent Favre

17/02/2012 Author: Laurent Favre

Enabling customised portfolio management at Ramius

Portfolio optimisation tools for hedge funds of funds are a fairly recent development.  Five to seven years ago there were no specific fund portfolio construction tools as the hedge fund industry was in its infancy. However, with in house systems maturing, standardised frameworks have been introduced that have opened the door to more flexible, package options like the ones we provide at AlternativeSoft.

Our products are designed to give all of the specific analytical functionality of an in-house system, but packaged with a user friendly interface so that our clients don’t have to worry about support or development issues.

The Alternative Solutions team at Ramius that is responsible for portfolio construction and management, analysis and risk management, providing a more customised approach for their clients, uses AlternativeSoft.  The system helps with client portfolio construction, building and managing portfolios and deciding what to trade, for optimum return within the constraints set by the client. The software enables the team to run simulations of stress tests and modeling against historical financial data for portfolios. 

Ramius also uses AlternativeSoft to analyse the risk characteristics of portfolios. The core risk data for a portfolio is calculated using AlternativeSoft and then exported into Excel where it is further analysed within particular frameworks to produce tailored reports. Portfolios can then be adjusted, as required, to meet client requirements.

Powerful analytical functionality helps to manage risk

The AlternativeSoft platform is used to provide a comprehensive analysis of portfolio exposures to economic factors, risk elements and hedge fund strategy styles. The platform is linked to all hedge fund databases, Bloomberg, Lyxor managed accounts and Morningstar. Hedge fund returns are updated daily if available. 

The export facility within the system means that once core calculations and analysis has been performed in AlternativeSoft, further more detailed and more custom analysis can take place to meet specific client requirements.

When I asked him about the system Vikas Kapoor, Co-Head of Alternative Solutions had this to say, “As an organisation, Ramius has been moving towards providing much more customised solutions for clients. AlternativeSoft is the perfect solution in that it enables us to create and apply specific client constraints on portfolios, which means that they are more likely to meet client needs.” 

“AlternativeSoft helps us to manage our portfolios more efficiently – it is a clean, uncluttered tool that helps us to use the data to make good business decisions. Our focus is on how to make investments, not to be technology experts. AlternativeSoft gives us a good, functional system that helps us to achieve this by concentrating on our core strengths of fund management.”

The author is CEO at hedge fund software provider AlternativeSoft. For more information about AlternativeSoft please visit: www.alternativesoft.com.

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