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Samlyn – Risk Management

Client Background

A global, tier one, Tiger/SAC spin, fundamental hedge fund, with $10 Billion in assets.

The Challenge

Current solution was inflexible and complex to implement, therefore, wasn’t being used. While the deeply fundamental investment team was currently working with a vendor of risk data, with a goal of a more proactive process, they were unable to implement a solution that was engaging for the team. The firm was close to cancelling with the risk data provider when EDS became involved.

Specifically, the Risk Data was being delivered in a table format (flat file) or through a limited software solution that was complex to work with. For this firm to improve its utilization of the content, they were going to have to hire additional people and build it themselves, a proposition that was very unlikely and incredibly expensive. The proactive vision they had for risk was very difficult to achieve with their current solution.

The team sought a flexible, easy-to-use and cost-effective solution to centralize — on their terms — organize/visualize internal and external decision-making intelligence, including market data, risk data, etc. that was core to decision-making.

The Solution

A high performance, real-time, easy-to-use and configurable Risk Management solution from EDS, built around their vision and investment process – implemented with precision, quickly and affordably – streamlining processes, providing valuable feedback, and supported by a highly experienced team of former investment professionals and quantitative analysts. They started with a low-risk, proof of concept (POC) that required minimal commitment from the client and proved the value upfront.

Result

Their vision of strong and broad engagement has been realized, with penetration of of active users across the investment team

The firm streamlined what would had required additional staff, multiple applications, vendors and manual processes into one, centralized, yet flexible solution across Risk Management, while working seamlessly with other in-house critical processes.

1. An Risk Management solution for Decision-making – With their Risk Management solution aligned with their vision, they were able to maximize the value of their research and intelligence to enhance decision-making and drive continuous improvements. Specifically, all risk content was captured, in real-time and was could be configured and organized multiple ways, into templates and/or powerful dashboards.

2. Time savings and research optimization: EDS replaced multiple shared Excel processes, as well as centralized all their risk information across multiple vendors, providing a user-friendly, productive environment to research, discuss risk management. EDS empowered analysts to surface risk more readily to decision-makers and those decision-makers were better prepared to implement it more proactively.

3. Achieving “Best Practices” Risk Management: With EDS, usability and the value of their risk data (from multiple vendors) skyrocketed, based on:

  • A simple and intuitive application that any member of the investment team could use.
  • Uniquely configurable to their firm, including master & sub- funds and each team and individual member.
  • Once click analysis, including simulating portfolio changes and optimizing for exposure changes.
  • The ability to identify multiple risk, factor, return and exposure changes across any time-series in a few clicks, helping the investment team gain valuable and actionable insights in real-time.
  • Ability to isolate both asset selection and outside risks and returns, down to analyst and stock level.
  • Before the trade, they can now incorporate factors into idea generation and portfolio construction.

4. Rapid implementation and strong compliance: The team was able to modernize and digitally transform their investment process, with little friction, creating greater accountability and transparency within the investment team. Importantly, all Intellectual Property (IP) was secure and, in-house, achieving “best practices” compliance and reducing leakage due to any employee turnover.

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