With its ability to model heavily-illiquid portfolios and to process complex multidimensional uncertainty, RiskKey® can greatly support the thought process and decision objectivity of:
CIO and investment officers
Risk and allocation officers
Manager research teams
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R&D
For endowments and foundations, R&D covers a broad range of areas, the most common area being pricing risk in extremely illiquid or complex situations.
Examples of commissioned projects and studies relevant for endowments and foundations:
Modeling and pricing risk for illiquid (or extremely illiquid) holdings
Modeling and pricing features in deals
Modeling and pricing complex real options in assets and liabilities
Minimum EBITDA growth required to compensate USD investor for taking risks in certain countries (related to co-investments and private equity direct investments)
Price of FX risk in foreign countries, including countries with no functional markets
Consultancy
Examples of consulting services for endowments and foundations:
AI + utility-based asset allocation optimization that accounts simultaneously for investment risk, liquidity risk, principal erosion risk and a spending pattern aligned with the organization’s mission
AI + utility-based simultaneous optimization of both portfolio and the spending/granting dynamic that is aligned with organization’s mission (e.g. maximize spending in recessions). The optimization accounts simultaneously for investment, liquidity and principal erosion risks.
AI + utility-based optimization of portfolio implementation
Maximize the forward-looking magnitude and duration of outperformance versus benchmarks and peers
Other total portfolio risk management functions: convexity management, multi-criterial leverage optimization, optimal investment sizing
Determine the optimal range (size and asymmetry) for each asset class in asset allocation
Tactical allocation; optimal positioning in allocation ranges
Probabilistic macro-dependent models for calls and distributions related to illiquid asset classes
Short-term liquidity optimization (e.g., to support margin calls from overlays, leverage, etc.)
Advanced liquidity stress testing
Nonlinear modeling of underlying managers. This is particularly powerful in the case of hard-to-model portfolios, such as diversifying, opportunistic, PE, or VC.
Nonlinear modeling of internally-managed sub portfolios
Various applications of modeling to manager vetting including hidden risk discovery, convexity assessment and risk pricing
Optimal liquidity sourcing and deployment; real-time quantitative support for rebalancing, entries and exits (also available on a self-service basis)
Optimization of the liquid portfolio serving a private investment (sub)portfolio
Training and support for managing the total portfolio directly in the integrated asset-liquidity-spending space
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FAQ
What is the difference between Aiperion consultancy and R&D?
In consultancy, we are generally able to apply our already developed conceptual frameworks and solutions to solve clients’ problems
In R&D (projects and studies), we need to develop and apply new conceptual frameworks or solutions to solve clients’ problems
How is Aiperion supporting endowments and foundations?
We offer discounts to organizations focused on supporting women and minority owned businesses
We are able to co-fund research and modeling work related to diversity and economic equality
Internal funding option for small endowments and foundations: if you have a project which is impactful for your organization and beyond but are budget constrained, talk to us; we will consider it for internal funding