A UK FinTech company focused on the asset and wealth management industries asked Parala to help power its fund manager peer group analysis and forward-looking fund ratings for its website using Parala’s AlphaPredictor® investment technology. The relationship was structured as a combination of consulting and investment technology licensing.

Parala created models within AlphaPredictor® for 30 peer groups which its client wanted to cover including US, Europe, UK, Global and Emerging Market equities and bonds. The peer group analysis and forward-looking fund ratings were updated each month for the following areas:

• Forward-looking fund ratings within peer groups for 1, 3, 6, 12, 24 and 36-month horizons
• Fund manager skill sensitivities to key economic cycle variables
• Fund exposures to important beta risk factors

Value delivered

• The client was able to insource the capability to generate updated analytics monthly for over 6,000 funds covering a broad range of unique data points from which insights could captured within and across fund peer groups
• The client was able to differentiate itself from other fund analytical platforms by offering forward-looking fund ratings at a time when only backward-looking metrics were provided by competitors
• By providing analytics on the business cycle sensitivities of each fund managers’ skills via an interactive web-based tool, the client was able to deliver unique, differentiated value never before offered to investors which allowed them to understand the following:
• 1. Which managers were likely to be more or less skilful in the current economic environment
• 2. Which funds could be combined to provide better diversification across the business cycle
• 3. Each fund’s relative sensitivity to individual business cycle variables compared to its peers