Elevator Pitch
Active Asset Allocation is a FinTech with proven track-record and recognised expertise that designs, with the help of Artificial Intelligence engines, bespoke investment solutions based on a proprietary risk management methodology and delivers them through an integrated digital platform.
AAA offers many different services, supported by extensive research and a team of 21 experts:
- Portfolio risk analysis
- Goal based investment solutions design or optimisation (AI)
- Dynamic risk control framework for portfolio managers (AI)
- Dynamic allocations, monitoring of investment strategies
- Strategic allocations, optimisation according to an individual project (AI)
- Individual reporting, summarising monthly performance and changes on the portfolios (AI)
- Distribution of mass-customised solutions, sales and monitoring of saving products to advisors and monitoring for end customers
- Individualised strategy with drawdown control
- Global Risk Indicator (AI)
- Historical simulation and filtered historical simulations
- Decision-making tool by refining the amounts to invest or the savings period of an individual project
The digital platform features different groups of modules for different users:
- Financial engineering teams
- Institutional Investors (B2B)
- Financial Advisors
- Clients of the financial advisors (B2B2C)
The modules and sub-modules can be used independently or together. For instance it is possible to offer an asset manager the possibility to construct investment solutions, follow them on the platform, input its market views on a regular basis, work with independent financial advisors that on-board their clients, create life projects, simulate the possible outcomes of those projects with the different investment solutions and propose an individualised allocation to each client and project that it is line with the investment solution monitored by the asset manager. The platform monitors all investments, performs automatic rebalancing and produces reports for institutional investors, advisors and end clients.
Problem Solved
We believe that too many crucial but uninformed investment decisions are made, which translates into the following challenges for us to address:
- How to build outperforming portfolios that will protect investors’ assets when the next crisis will come?
- How to help professional investors implement solution to challenge 1
- How to help financial institutions digitalise the distribution of the solutions to challenge 1 and 2
Solution / Technology
We design bespoke investment strategies based on a proprietary risk management methodology and artificial intelligence and deliver them through an integrated digital platform built internally and with APIs.
About our asset allocation algorithms
We have developed a proprietary dynamic asset allocation methodology that combines (instead of opposing) three different risk management approaches: diversification, hedging and portfolio insurance. It takes the form of multiple, embedded TIPP models that are calibrated in a stochastic world, over thousands of possible market evolutions. The parameters of the goal-based optimisation are determined using a genetic algorithm.The main advantages of this approach are:to put the client objective at the heart of every single investment decisionto transform risk management into a new source of performance for the portfolio
About our Global Risk Indicator (GRI)
To mitigate the trend following behaviour of our models and indicate exit and entry points for the equity market, we have developed an advanced equity market crash indicator. It takes into consideration macroeconomic, sentiment and risk indicators that have a predictive power in market stress. The weights allocated to each of these indicators are determined using an efficient multivariate robust model based on machine learning and classification. We are currently working on introducing a semantic analysis of social media to further enhance its predictive power.
Competitive
About our digital platform
The digital platform encapsulates our asset allocation methodology to provide goal-based, mass-customisation solutions to large asset managers, private banks and insurers.
Technology and innovation are our DNA: our strategies are systematically calibrated over 1000 market projections to ensure their robustness, our proprietary models are built applying genetic algorithms, we invented a retirement planning solution for which a patent is pending, and we were the first to market an individualized allocation corresponding to the risk-budget of each investor. We move very fast thanks to a short decision-making process and the freedom to prototype any ideas we come up with.
Going digital is not a UX façade, we have encapsulated our expertise in an intuitive and scalable framework. It allows us to change the way people go about planning their life projects, the same way that we have set new standards in the portfolio management industry.
Market Size
The assets under management in the Robo-advisors segment amounts to €1,277,089M in 2020, and are expected to show an annual growth rate of 21,0% by 2023. The Robo-Advisors segment counts 70,508.6 thousand users in 2020, and is expected to attain 147,018.4 users in 2023.
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