Risk Managment: Investment Bank Solution for Asset Manager

Maintainable, transparent models replace in-house development based on Excel-VBA

Thetaris, a world-leading provider of modeling solutions for the financial sector, releases Theta Suite Portfolio Market Risk Management. This novel risk management software solution offers asset managers and small to medium sized insurance companies the flexibility and performance which so far has only been achieved with applications tailored to major financial institutions. 

Users are able to comply with international and local regulations for risk management without being overstrained by the complexity, the development and administration efforts as well as software spending. The tool replaces in-house Excel-VBA-solutions and is ideal for small work groups. Models built with Theta Suite Portfolio Market Risk Management are fully customizable in line with individual requirements, yet still easily maintainable and transparent and thus less prone to mistakesThe solution is easy to learn and use: So if a risk manager should leave the company, the successor can smoothly carry on the work of his predecessor - valuable knowledge is retained in-house.

Theta Suite Screenshot (source: Thetaris)

Risk management is a growing challenge with regard to regulation activities, especially for asset managers and smaller insurance companies. Since the financial crisis investors, customers and the public have become more sceptical, which puts even more pressure on financial service providers. A successful risk management is crucial with respect to competitive advantage; weak spots in the portfolio or in particular products must be avoided. At the same time especially smaller financial service providers need customizable, scalable solutions and approaches to compete in this highly contested market for insurance and financial products.

“Today, software for risk management of smaller financial service providers has to provide the same level of quality as applications used in large corporations, especially with respect to performance and flexibility”, Andreas Grau, CEO of Thetaris, explains. “Classical risk management based on normal distribution is not effective anymore. A method like the Markowitz portfolio theory, developed 60 years ago, is obsolete considering the globalized financial markets. Core banking systems implemented at large investment banks are often oversized, provide needless functionality, are overly complex and too costly. As an alternative many companies develop in-house solutions based on Excel-VBA. The disadvantage of these self-made solutions is their non-transparency and poor maintainability. And, if the developer leaves the company, he takes critical knowledge about administration and further development of the software with him. Furthermore, for many applications the performance of Excel is simply not high enough.”

Theta Suite Portfolio Market Risk Management solves this dilemma. The tool is based on the integrated development environment Theta Suite and comes with an advanced feature set, suitable for asset managers and smaller insurances. Users are provided with a flexible all-round solution that solves complex problems with easy modeling steps. Any individual financial product can be designed and have its risks calculated.

Theta Suite can be used flexibly for different tasks like risk management, modeling of financial risks in companies or the evaluation of structured products. Exemplary use cases are the risk-return profile of a complex structured bond portfolio or the hedging of modern market-linked life insurance products with capital guarantees (e.g. Variable Annuities) considering risk and return – an issue with growing relevance, that was also discussed at the Munich Chapter Meeting of Professional Risk’ Managers Association (PRMIA) beginning of April.

Theta Suite is the ideal toolbox for the Monte-Carlo method, as it makes complex models inspectable, maintainable and offers very fast calculation. Due to full compatibility with Excel, input data can optionally be drawn directly from Excel or be imported from existing data bases – including MS Access. On the other side the export of result data to Excel is also possible, thus existing Excel reporting templates programmed in Excel VBA can be used. That way investments in software development are protected and compounded.

Theta Suite Portfolio Market Risk Management is now available. The solution is installed on workstations. In addition, a server version is provided for extensive calculations. Licensing fees are incurred per workstation, a server license can be purchased separately. Additional information is available at Thetaris GmbH (www.thetaris.com).

About Thetaris GmbH

Thetaris is a world-leading provider of modeling solutions for the financial sector. These solutions are designed to support quantitative analysts and actuaries to manage financial risks in the face of escalating complexity in the world of finance. To this end, Thetaris has developed a landmark method called Computer Aided Finance (CAF). Thetaris offers consulting and innovative means of intuitive modeling, detailed analysis and automated creation of financial pro-ducts. Theta Suite and Theta Proxy are its flagship products, to be applied in trading operations, development of new financial products and risk management.

Public Relations contact:

Thetaris GmbH
Dr. Andreas Grau
Leopoldstr. 244
D-80807 Munich
+49 89 208039-480
E-Mail: grau@thetaris.com

talkabout communications gmbh
Ursula Schemm
Balanstra├če 73
D-81541 Munich
Tel.: +49 89 459954-24
E-Mail: uschemm@talkabout.de

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