Algorithmics, an IBM company, and Axioma, a provider of multi-factor equity models, today announced a business relationship that will benefit both firms' buy-side clients.
Algorithmics will offer data derived from Axioma's multi-factor equity models as part of Algo Risk Service, Algorithmics' hosted portfolio construction, risk management and reporting service.
There is market demand for customized risk solutions that offer a choice of data sources and modeling options. The combined proposition addresses this need by bringing together Algorithmics' innovative and award-winning risk solutions and data derived from Axioma's proprietary equity models.
Axioma Risk Models offer a wide range of regional and style-base models that are recalibrated daily, with re-estimations and production of factor exposures, covariance matrices, and asset specific risks. This is an important differentiator for this partnership in a market where monthly recalibration of equity factor models is the norm. With Axioma data available through Algo Risk Service, Algorithmics' clients can draw on reports from Axioma's multi-factor equity models to improve their equity coverage and consistency between their front and middle office.
Dr Sebastian Ceria, CEO, Axioma, said: "The benefits of working with Algorithmics are very clear to us. Most clients want to achieve modeling consistency between the risk-focused middle office and investment-oriented portfolio managers in the front office; our collaboration with Algorithmics provides that consistency of equity risk. Axioma's front office clients will enjoy consistent modeling with their middle office risk departments."
Dr Andrew Aziz, Executive Vice President of Buy-Side Risk Solutions at Algorithmics, said: "Axioma's reputation as an innovator in equity modeling complements Algorithmics' commitment to innovation. For our clients, this relationship with Axioma offers modeling across all asset classes and the convenience of having the model as part of Algo Risk Service. Importantly, it also gives clients the flexibility to introduce patented equity modeling as part of their custom solution while maintaining consistency with the Axioma models used by their front offices. As we evolve our solutions for the buy side, we continue to recognize the importance of being able to offer customizable solutions to meet our clients' needs."