State-of-the-art risk management system to be developed based on bleeding-edge technologies
Zurich, November 27, 2018 – XY, an international group specialized in strategic consulting and the control of large estates, was selected by a European government to create the system to monitor and control the evolution of its prime equity portfolio held by its sovereign fund. The objective is to support an organization with several hundreds of billions of euros in assets, lending money to the State and public entities, acquiring strategic equities and investing in financial, infrastructure and real estate projects considered of prime importance for the development of the country’s economy.
“The objective of this new endeavor is to identify and observe the key variables that affect the evolution of the overall value of the aggregated asset base and its cumulated dividends, as well as of the value of each individual investment,” says Daniele Migani, Founder and CEO of XY. “Our task is to measure on an ongoing basis to what extent these parameters actually influence the future value of companies and their dividend flow, and determine if they can be used to make accurate predictions. Over the last few years, digitization and globalization have completely reshaped the structure of the world’s economy and of the finance sector in particular. This has led to the rapid obsolescence of the traditional risk measurement models that are still universally employed to date. These models are based on interest rates and a few other variables that do have a strong impact on the overall risk scenario, but are by far not sufficient to describe its complexity.”
XY and the sovereign fund are designing a new and extremely powerful risk management system, factoring in methodologies that can take into consideration more – and more complex – variables, including both financial and economic parameters: on one hand variables such as trends in commodity trading, oil price, currency exchange rates, levels of liquidity injected into the economy by central banks, and the probability of default of emerging countries; on the other, variables that are internal to the companies invested in, such as aspects related to their income statement and balance sheet. In other words, a revolutionary risk model that is bound to the structure of the net financial position of all companies monitored.