Our Services Quantitative solutions
 

Quantitative solutions

MJ Hudson quantitative solutions provide tailored risk reporting solutions that enhance transparency and engagement with stakeholders.

Our award-winning analytics and reporting technology generates fully customisable, co-labelled, risk and regulatory risk reporting solutions. We offer high-quality, cutting-edge risk reporting specifically designed to satisfy investment fiduciary obligations across asset classes.

MJ Hudson Quantitative Solutions provide independent, first-class Managed Software as a Service (MSaaS) fintech solutions for the investment fiduciary marketplace.

Asset managers, fund services and wealth managers face a confluence of market, political and regulatory demands.

  1. Regulation
    Ongoing financial regulatory reporting regimes (AIFMD, PRIIPs, CP86, CSSF 18/698).
  2. Transparency
    Investors and regulators demand greater transparency on performance, risk and fees.
  3. Tax and domiciliation
    Substance rules pose ongoing challenges to traditional fund and wealth management industries.

Widely-used, outdated risk processes typically over-rely on internal personnel working with spreadsheets and market data vendors.

Even templated software solutions require data to be prepared and submitted in a predetermined template.Such processes are costly, inefficient and better served by a bespoke automated processes.

Our award-winning risk analytics and reporting technology generates fully customizable, co-labelled risk reporting solutions.

For an example of our work, click here.

Strong risk management and corporate governance are key pillars of our responsible investment policy and our chosen independent depository and risk service providers, MJ Hudson Quantitative Solutions, are now able to reinforce our risk oversight and transparency through their collaboration and the provision of regular liquidity stress testing.
David Mellul, Managing Director of Varenne
Who we work with
What we do
Investment restriction monitoring

Customisable compliance reporting solutions designed for portfolios comprised of level 1 and level 2 assets. This solution, known as RiskMonitor® Compliance, addresses increasing industry and regulatory demands for reporting which is clear, flexible and can be tailored to meet the needs of multiple stakeholders. COOs and boards benefit from concise, customised reporting, while risk managers and compliance officers benefit from greater automation and fewer manual processes.

Key features:

  • over 100 existing investment restrictions including UCITS restrictions
  • gross and commitment leverage and concentration limits
  • ‘unpermitted asset’ rules applicable to an entire asset-class
  • customer restrictions such as ESG criteria or other client specific risk criteria
  • aggregate risk of distinct portfolios or accounts into a single coherent risk report
  • wide coverage of 18 distinct asset classes supported by distinct risk and analytical methods
  • illiquid asset cover including structured products and OTC derivatives
Investment risk reporting

Simple yet flexible risk monitoring solutions based on the provision of an independent and objective investment reporting framework. The RiskMonitor® Performance solution is designed from experience and knowledge of the fiduciary business coupled with institutional risk and reporting technology. While addressing regulatory as well as client demands, it aims to enhance the fiduciary — investment manager relationship rather than alter it.

This solution identifies performance, liquidity and fee details for fund of funds, as well as factor analysis in simple fact sheet style reports for funds. It offers a simple yet flexible risk monitoring solution based on the provision of an independent and objective investment reporting framework. MJ Hudson Quantitative Solutions also offers consulting support to resolve issues such as policy review and manager selection.

Key features:

  • simple traffic light outcome to evaluate investment risk
  • management reporting across all accounts to complement account-level reporting
  • reporting can be for any periodicity from annual through to daily and suitable for all asset classes
  • reporting can be based solely on historical returns or extend to position-level data
  • wide range of benchmarks including “cash +” performance targets
  • coverage of managed accounts as well as investment funds
  • account aggregation functionality
  • advanced optimization/efficiency analysis
  • accessible and efficient reporting which can be co-labelled
Liquidity stress testing

The RiskMonitor® Liquidity solution addresses regulatory and governance concerns on asset liquidity and fund’s ability to satisfy redemption terms. This solution suite leverages the RiskMonitor Dashboard and data integration with a wide range of fund administrators to incorporate fund shareholder, as well as asset details.

Additional consultancy support can be provided to review and develop liquidity management policies, including the provision of ongoing reporting and liquidity stress-testing. This solution employs a range of sophisticated modeling techniques across multiple asset classes, and is relied on by leading alternative asset managers and fund services businesses.

Key features:

  • addresses ESMA Liquidity Stress Testing (LST) guidelines which come into force September 2020
  • board-friendly reporting
  • sophisticated asset liquidity metrics including modeling for bond instruments and classifications for CIU (third party funds)
  • market impact analysis
  • shareholder and subscription / redemption analytics
  • option to choose between ‘waterfall’ and ‘top-slicing’ approaches
  • liquidity scenario event and post-event compliance analysis
  • complementary to Annex IV managed service
Private asset risk reporting

A specialist end to end Managed Software as a Service (MSaaS) for private asset funds based on a powerful and intuitive cash-flow model providing ‘fit for purpose’ risk analytics that incorporate and aggregate asset-specific expectations and realized cash flows. The ValuSim tool serves PE and RE funds and family offices by demonstrating independent oversight and performance and risk appraisal.

Key features:

  • high presentation quality
  • customisable reporting suitable for key stakeholders and investor reporting
  • comprehensive range of private asset investment restrictions to demonstrate prospectus and risk compliance
  • simple to use input templates
  • connectivity to leading fund administrators
  • scenario and stress-testing solution
  • DCF based valuation appraisal
  • FQ modelling and analysis
Regulatory reporting (UCITS, Annex IV, PRIIPs)

MJ Hudson Quantitative Solutions provides a managed service solution to provide Annex IV filings, UCITS reporting and PRIIPs KIDs, EMTs and EPTs altogether known as RiskMonitor® RegTech. Our solutions support investment firms subject to EU and UK regulations by providing the risk metrics, data and reports to meet the regulatory risk reporting requirements of: UCITS, PRIIPs, and the AIFMD.

Managed Annex IV

  • XML Filings to meet any EU regulatory format
  • solution for any asset type including private equity and real estate
  • provision of full filing or delivery of specific risk inputs including: VaR, greek
  • stress-tests and liquidity
  • complementary risk reporting

UCITS reporting

  • UCITS restriction monitoring
  • absolute VaR – UCITS compliant
  • global exposure
  • exposure by counterparty
  • liquidity analysis

PRIIPs/EMT/EPT

  • meets requirements of traditional and liquid alternatives – i.e. category 2 PRIIPs
  • cash flow model supports performance scenarios for Category 1 PRIIPs
  • high presentation quality KIDs with bespoke client specific templates
  • transparency on calculations and supporting materials to enable board appraisal and evaluation
  • ongoing monitoring and transmission to fund platforms
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Our thinking

In private equity, consistency of returns (and a manager’s ability to impact this through risk mitigation) is a key evaluation metric, but backwards-looking analysis doesn’t tell the full story. To find out which methodologies can provide deeper insight, download this whitepaper.
White paper
Risk is what you make out of it … the relevance of ex-ante versus ex-post risk in private equity
“Past performance is not an indicator of future returns”. Indeed, traditional measures of private equity performance cannot predict the future. Thankfully, the MJ Hudson PERACS Alpha is a much more reliable Oracle. To find out how it works (and why other approaches don’t), download this whitepaper.
White paper
A new perspective on returns persistence in private equity
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Varenne Capital
Fund managers
Business development contact:
Varenne Capital
Varenne Capital
ESMA / Liquidity stress testing
Varenne Capital Partners is a process-driven, global investment manager whose purpose is to deliver superior long-term returns with the minimum necessary risk-taking. They strive to achieve this goal by combining complementary investment frameworks – Long Equity, Short Equity, Merger Arbitrage and Tail Risk Hedging – in a single strategy.
The new ESMA liquidity stress testing guidelines came into effect at a challenging time for the funds industry due to the on-going impact of COVID-19 on operations and financial markets. Through this partnership with MJ Hudson Quantitative Solutions, INDOS is now able to facilitate independent liquidity stress testing for its clients in an efficient way, reducing their operational burden and enabling them to demonstrate compliance with the new requirements.
Bill Prew, CEO of INDOS Financial
NS Partners
Fund managers
Business development contact:
NS Partners
NS Partners
Liquidity stress testing reports / RiskMonitor / UCITS & AIFs
Founded in 1964, NS PARTNERS (formerly Notz Stucki) is now one of the largest independent investment management groups in Switzerland and in Europe. In its 57 years, NS PARTNERS has developed unrivalled expertise in selecting the best fund managers from around the world and combining them to build top performing and resilient portfolios. NS PARTNERS Group manages or administers some CHF 11 billion in assets across three highly complementary branches: - Wealth Management: Discretionary and advisory management - Asset Management: NS Funds and investment solutions - ManCo: Fund engineering and dedicated fund services
I really appreciate working with the MJ Hudson Quantitative Solutions team – they are very responsive and flexible to our needs. The quality of the tailored reports provided, in terms of content and data feeding process, is top level. Their flexibility, in my opinion, is due to their experienced team using MATLAB to develop their proprietary reporting and calculation tools. They demonstrate a practical approach and are always on time delivering the reports.
Romain Pidoux, Head of Risk Management at NS Partners
Breaking Point
Fund managers
Business development contact:
Breaking Point
Empiric Capital
Fund managers
Business development contact:
Empiric Capital
Louvre Trust
Family offices, foundations, and private wealth
Business development contact:
Louvre Trust
True Potential
Corporates
Business development contact:
True Potential
ZAS Malta
Corporates
Business development contact:
ZAS Malta
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