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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.