Aberdeen Standard Investments’ (“ASI”) Private Markets Solutions team and the Centre for Risk Studies at the University of Cambridge Judge Business School (“Cambridge”) today announced a strategic collaboration.
In order to deal with the complex and opaque nature of investing in Private Markets, ASI’s Private Markets Solutions team has developed a Private Investment Sensitivity Model (“PRISM”) to initially be a tool in the management of ASI ‘s [flagship] Global Private Markets Fund. Integration with Cambridge’s substantial library of scenarios built upon their Science in Scenarios™ platform will provide quantified views from a wide array of real world risks.
PRISM analyses the components of performance drivers for the assets in the portfolio, including global macro, markets specific and idiosyncratic factors. It draws from and utilises specific data points from each investment to assess future exposures and expected performance of investments – private equity and debt, infrastructure and real estate - that have long term horizons and are notionally illiquid.
Nalaka De Silva, Head of Private Market Solutions said: “As Private Markets become an increasingly material part of client portfolios, portfolio construction and risk management must be at the centre of the investment process. Given the complex impact of Covid-19, a deeper understanding of portfolio risk is more important than ever. We are very excited about building on our framework with the team at Cambridge and sharing the insights it generates with our clients.”
By adding real-world scenario capability to the PRISM framework via the collaboration with Cambridge, PRISM will seek to quantify the effects of a wide variety of potential and emerging risks on a portfolio. Cambridge’s scenario suite provides industry standard stress tests covering a selection of threats from a structured taxonomy of business risks. The Cambridge scenarios have been established from extensive research to assess and quantify potential emerging threats that could arise from Financial, Geopolitical and Technological risks along with those that stem Environmental, Social and Governance considerations.
Andrew Coburn, Chief Scientist at Centre for Risk Studies,Cambridge commented: “This collaboration allows for the interaction and analysis of our own risk research with portfolios of private markets assets from a global asset manager. This is a unique and valuable insight and we look forward to working with ASI. ”
Campbell Fleming, Global Head of Distribution at ASI said: “Our clients want and expect data driven analysis similar to what they already receive for their public market investments and also for us to leverage our research capabilities hold to better inform investment decisions. We believe that PRISM will not only be an important tool for us to use across our Private Markets portfolios. Ultimately pension funds, insurers and sovereign wealth funds could employ to assess and monitor their Private Market investments.”
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For further information please contact:
James Thorneley, Global Head of Media Relations
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Notes to editors
About Aberdeen Standard Investments
- Aberdeen Standard Investments (ASI) is a leading global asset manager dedicated to creating long-term value for our clients, and is a brand of the investment businesses of Aberdeen Asset Management and Standard Life Investments.
- With over 1,000 investment professionals we manage £469 billion (as at 31 December 2019) of assets worldwide. We have clients in 80 countries supported by 50 relationship offices. This ensures we are close to our clients and the markets in which they invest.
- We are high-conviction; long-term investors who believe teamwork and collaboration are the key to delivering repeatable, superior investment performance. We are resolute in our commitment to active asset management.
- ASI is the asset management business of Standard Life Aberdeen plc, one of the world’s largest investment companies.
- Standard Life Aberdeen plc is headquartered in Scotland. It has around 1.2 million shareholders and is listed on the London Stock Exchange. The Standard Life Aberdeen group was formed by the merger of Standard Life plc and Aberdeen Asset Management PLC on 14 August 2017.
About Cambridge Centre for Risk Studies at the University of Cambridge Judge Business School
- The Cambridge Centre for Risk Studies is a research centre of the University of Cambridge Judge Business School. The Centre works closely with business partners in tackling complex issues of management science in risk. This policy of deep engagement has enabled the Centre to develop tools and solutions for businesses. The Centre’s leadership combines academic excellence with industry experience.
- The Centre’s taxonomy of business risks is widely adopted by global companies to further their analysis, assessment, and mitigation of global vulnerabilities
- The Centre’s rigorous scenario-based framework includes a wide range threat classes including; financial, geopolitical, technology, environmental, social and governance.
- Further information on Cambridge’s Scenario Suite and other risk management resources can be viewed at cambridgebusinessriskhub.com
For further information please contact:
Michelle Tuveson, Executive Director at the Cambridge Centre for Risk Studies
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