Ashburton Investments, FirstRand Group’s investment management business, has implemented FINCAD’s F3 Excel Edition for the key building blocks to develop its front office portfolio management toolkit.

FINCAD is a provider of valuation and risk management solutions, with thousands of users worldwide including clients in South Africa.

Matt Streeter, Capital Markets Strategist at FINCAD, said Ashburton were able to build a solid back-end foundation, which added more stability and control. “It helped improve their investment process and their risk management process.”

“By rolling out F3, they were able to illustrate how they are a very robust investment management shop and this is something that is valuable for their clients,” he told Africa Global Funds.

Ashburton Investments identified a need for a quantitative analytics solution to develop its front office portfolio management toolkit for managing LDI (liability driven investment) mandates, including portfolio construction, implementation, and on-going risk management.

Streeter said that one of the challenges Ashburton were having is that each new LDI mandate was very complex and very unique. “They were looking for a tool that would be flexible enough to adapt each new mandate that comes in and that could be customized.”

Despite having access to in-house analytics from FirstRand, Ashburton Investments decided to seek an external pricing and risk solution, needed to analyze exposure to a wide range of risk factors related to LDI including interest rates, inflation, credit, equity, and liquidity.

Additionally, Ashburton Investments needed an analytics solution that could effectively quantify the collateralization impact on their derivatives and aid their investment decision making when comparing cash and derivative-based hedging instruments.

FINCAD’s F3 is the unified analytics solution used across the investment process of each LDI mandate. With this solution in place, Ashburton developed a robust portfolio management toolkit.

Paramesan Mathen, Institutional Solutions, Ashburton Investments, said: “Most of our competitors are only using ad-hoc desk-top solutions. Having a pricing and risk system with a solid back-end foundation and stability has made our investment process more robust. With the holistic F3 solution in place, we offer enhanced credibility, better investment management, and ultimately better performance for our portfolios.”

Streeter said that although FINCAD already has many South African clients, they are continuing to build their presence in Africa.

“Our approach to valuation and risk analytics is a core focus on delivering competitive advantage to our clients. Our clients gain the flexibility to value and risk-manage virtually any multi-currency, multi-asset derivative portfolio transparently and holistically across business units and the enterprise. Among many aspects, this flexibility enables our clients to build exotic market conventions, model the market consistently under any numerical method, and produce fast and accurate first-order risk for any structure or portfolio,” he said.

“We’re committed to seeing our clients gain competitive advantage when they choose FINCAD. Ashburton Investments is a great example of how financial organizations are utilizing their valuation and risk analytics to gain competitive advantage,” he added.