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Sherpa Funds Technology is granted the global patent for Optimal Risk Sizing

Wednesday, July 01, 2015
Opalesque Industry Update - Sherpa Funds Technology (SFT), a Singapore based company that provides Asia- based fund managers with advanced mathematics and analytics, announced on 1 July 2015 that it has been granted the global patent for Optimal Risk Sizing (ORS), a game-changing technology which aligns Investors’ and Managers’ interests and eliminates inconsistent trading behaviour by applying process-engineering thinking to portfolio management.

Hedge funds, wealth managers and portfolio management teams with assets under management (AUM) ranging from USD10m to USD5bn can use ORS to enhance portfolio returns and raise AUM. ORS accounts for Investors’ risk preferences and uses Portfolio Managers’ asset selections to create portfolios best suited to match Investors’ long term goals. For a monthly subscription fee, ORS is offered through web-delivered software-as-a- service access with direct Excel interface for multiple users.

Over time, ORS’ interactive user interface also forms a link between Investors and Portfolio Managers. By allowing Investors to accurately specify and log their risk tolerances, ORS helps create clear, accountable communication channels for smoother operations between Investors and Managers.

Richard Waddington, CEO and Founder of Sherpa Funds Technology, said, “Sherpa Funds Technology’s patented ORS uses behavioural econometrics and advanced computational methods to account for investors’ risk tolerance, the portfolio manager’s investment skill and the long term business goals of both parties. This allows clear differentiation among investment products, while increasing control in the portfolio. As a result, there is greater focus on asset selection and better returns for investors.”

On the back of securing the patent, Sherpa Funds Technology also announced key appointments to boost ORS’ presence in Asia.

Craig McGee, who recently left a banking career to join as Partner at Sherpa Funds Technology in March 2015, added, “With ORS, Asia will have an exciting opportunity for Investors to gain better transparency over the Portfolios Managers’ investment decisions. By offering a disruptive piece of pre-trade Portfolio Management analytics, Sherpa Funds Technology is set up to help Investors and Fund Managers grow in a win-win manner.”

Dr. Catalin Burlacu, Adjunct Professor (Finance Business Technology) at SMU who joined Sherpa Funds Technology’s Advisory Board in May 2015, said: “This innovative approach to Portfolio Optimisation is a logical extension of Markowitz’s Nobel prize winning work, taking into account that Investor Risk Preferences has many implications for the way money is managed, by understanding both the risk in the portfolio and improving returns.”

To date, ORS has helped raise USD300m in an equity long-only fund, and successfully completed beta tests on large equity long-short and commodity portfolios. The interactive software encourages knowledge transfer among investors and managers who share similar risk tolerances.

press release


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