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BlackRock Solutions has completed the integration of global technology company Impact Investing, which it acquired mid-last year, and hopes its expanded suite of analytical software tools will appeal to newly risk-wary Australian super funds and fund managers. The enhanced business now includes analytical software tools across both equities and fixed income, and allows institutional investors to analyse the risks within their portfolios, drilling down to an individual stock level. Nigel Allfrey, managing director of BlackRock Solutions, said the new business was released internally to BlackRock’s asset management teams in January, and was now being progressively rolled out on a global basis.
“We are now presenting to our external client base and pitching the equity analytics story alongside the fixed income analytics story to our global client base, and we’ve been doing that for the last two months,” he said. BlackRock, which was a client of Impact Investing, purchased the business in July last year after the Merrill Lynch acquisition saw the asset manager expand beyond fixed income into equities. Impact specialised in analytical software tools used by equity portfolio managers to construct efficient portfolios.
The suite of tools – which is only offered as a hosted service – includes Aladdin, an enterprise investment management platform; Green Package, a portfolio risk analytics platform; AnSer, a fixed income and derivative calculator; and IMPACT, an equity portfolio analytics tool. Enda Mahoney, director of Black- Rock Solutions, said the tools could be used by super funds to calculate various portfolio level risk measures including value at risk, tracking error (ex ante) and stress testing.
“We can take portfolios today and run them through a set of pre-defined scenarios we’ve set up in a ‘what if ’ analysis,” he said. “We can stress test the portfolio for the event, and for how the portfolio will perform after the event.” Allfrey said risk management was at the forefront of institutional investors’ minds today. “On the investment side, the focus is on not only return but the cost of that return in terms of the risk profile,” he said. “There is demand for ‘what does risk mean; how do I measure that; how do I control it?’ [This is] the most important question in the investment world today.” BlackRock Solutions has 150 external clients, including 14 pension funds or endowments.
