Venn Partners unveils structured products risk tool
Credit advisory and investment partnership Venn Partners has launched Venn Risk Analytics, a financial analysis platform that it says will provide an independent and transparent approach to the analysis and valuation of structure finance products.
VeRA is designed to help users improve their governance levels for risk management and reporting, establish a framework for regulatory and economic capital allocation, respond to requests from internal and external stakeholders, run stress simulations across whole portfolios, identify investment opportunities, value complex and illiquid credit products and compare fundamental valuations with market prices.
VeRA uses comparative analysis to compare bond fundamentals and risk adjusted returns. It also simulates potential bond performances around the forecast base case and calculates the probability of these outcomes.
The product is currently being targeted at portfolio and risk managers at banks, insurers, institutional investors and alternative funds, and is already being used to advise on £2 billion of asset backed securities.
In recent months, European regulators have taken steps to counter systemic risk – for example, in March the Bank of England’s Financial Policy Committee determined that UK banks must find £25 billion of fresh capital this year. According to Venn Partners, this is likely to be achieved less through issuing new shares or boosting earnings and more by de-leveraging and selling down assets more aggressively, including asset-backed securities portfolios.
“A whole range of financial institutions, banks, insurance companies, alternative funds have a need to manage better the risks in their ABS portfolios and seek opportunities to enhance their returns on these securities and VeRA offers probably the most independent, transparent and consistent approach to the analysis and valuation of structured finance products in the market,” said Richard Green, director at Venn Partners.
