A Comprehensive Buy-Side Risk Solution
Client: Osool Asset Management
BSC (c) (Osool)
Location: Kingdom of Bahrain
Firm Type: Private company owned by the pension fund, responsible for managing its assets
AUM: ~ $11 billion
Client: Since 2015
– Integrated IFRS accounting with a centralized trusted data source
– Real-time access to performance and risk views
– Automation- and exception-based workflow for middle- and back-office operations
– Risk forecasting providing what-if
and ad hoc scenario analysis
– Risk transparency providing calculation and detailed data for deeper risk analysis
– Flexible investment reporting portal
The Business Challenge
The pension fund did not have a comprehensive risk solution. Exposures were being monitored on spreadsheets using manual processes and data extracts. Osool was created, and it brought new solutions for managing and reporting on the pension fund’s investment portfolio, to support the growing needs of its clients and regulators.
The legacy system being used to generate fair value was a cost accounting system, which required manual steps to generate the required data. The lack of a centralized trusted data source compounded the problem for the operations group, resulting in the need to manually review numbers.
The Eagle and Vega Solution for Osool
––Eagle Data Management, Accounting and Performance Measurement
––Vega Dolphin Risk
Osool now has a system that provides seamless and integrated middle- and backoffice operations without the need for multiple integration points and manual workflow steps. Eagle’s vast experience combined with integrated risk data produced by Vega resulted in a winning solution for Osool.The comprehensive risk framework put in place using Vega’s Dolphin solution enables real-time risk analysis with Eagle’s solution as the central data source.
Users can now dynamically create composite portfolios as well as calculate performance and risk numbers. In addition, required forward looking (i.e., ex ante) risk measures can be calculated at both the portfolio and security level.Risk forecasting support for what-if analysis and ad hoc scenario generation enables dynamic stress testing and scenario analysis. Other risk capabilities such as sensitivity analysis (e.g., PV01, DV100, KRD, CR01, etc.), accurate cash flow projections (to support asset-liability management), economic value of equity (EvE), and earnings at risk (EaR) add to the overall risk framework, making it more robust.
The VaR back testing feature provides the risk team with the ability to validate the risk models and allows for tuning as necessary.
Investment data—accounting, performance and risk—is now coming from a trusted centralized data source, for users to interact with through a user-friendly web interface.
With the Eagle–Vega solution in place, Osool’s operation is more automated and accurate,providing necessary information in real-time for all users. The Eagle Performance solution,combined with Vega’s Dolphin risk framework, automates the management and measurement of risk.
Realized benefits of the solution include:
––Accurate portfolio information available on a real-time basis
–– Increased automation using exception-based workflows
––Reduction of month-end closing cycle by 5 days
––Shortened production cycle for monthly risk profile report by 10 days
––50% reduction in manual operational processes, including the booking of
transactions, resulting in staff spending more time on higher value activities
The combined performance and risk platforms provide a detailed understanding of the portfolio. Those views, supplemented by dynamic risk forecasting capabilities, have helped Osool’s clients understand potential risks in their portfolio.
Periodic back testing of VaR has provided the much needed comfort that the forecasted risk numbers are indeed valid.
Osool is an asset management company, serving the interests of its founding shareholders: Bahrain’s Social Insurance Organisation (SIO) and the Military Pension Fund (MPF). The Company’s fiscal and social responsibilities are to provide sustainable financial security for pensioners and their families, while supporting the objectives for economic growth of the Kingdom of Bahrain. Osool fosters the focused vision of an independent, fully-fledged asset management company. Its objectives are to deal in financial instruments as principal and agent, to provide management and advisory services relating to those financial instruments,and to direct collective investment undertakings. Osool is licensed as an Investment Business Firm (Category 1) by the Central Bank of Bahrain.
About Eagle Investment Systems
Eagle is committed to helping financial institutions worldwide grow assets efficiently with its award-winning portfolio management suite of data management, investment accounting and performance measurement solutions that are delivered over its secure private cloud, Eagle ACCESSSM. Eagle deploys trusted solutions and services that create operational efficiencies and help reduce complexity and risk. Eagle Investment Systems LLC is a subsidiary of BNY Mellon.
“Vega’s Dolphin Risk has provided OSOOL a comprehensive multi-asset/multi-currency risk solution that provides real-time risk measurement and reporting for our portfolios.Ability to create ad-hoc scenarios for dynamic stress testing and scenario analysis enables OSOOL to assess risk in real-time for changing market conditions. The flexibility to quickly enable adding of new models for new instruments allows us to bring new investments into the portfolio with reduced time to market.In addition, implementing Dolphin Risk has helped automate risk reporting and shortened production cycle of monthly risk profile report by 10 days.We selected Dolphin Risk for its usability, fast deployment and ease of integration into our Eagle data management platform.The risk analytics capabilities i.e. VaR, EvE, EaR, Sensitivity Analysis, etc enables us to assess value/risk and help make decisions in real time.Vega’s team understood our risk needs and exceeded our expectations by successfully integrating and implementing the Dolphin Risk solution in record time.Vega’s support has been up to the mark and all queries have been resolved in timely manner. With support team located in close time zone, support staff are reachable on real time basis.”
Abdulla bin Khalifa Al Khalifa
“ Things have changed quite positively at Osool in terms of process flows and transaction execution after the implementation of Eagle and Vega solutions. Implementing these systems has helped Osool achieve its objective of automation and accuracy. On the risk front, we now have a system which gives us real-time insight into the risk of a new investment.”
Khurram A. Mirza
Head of Asset Allocation, Osool