PFaroe E&F

Investment risk and simulation analytics for endowment portfolios with a focus on spending requirements and achieving mission objectives.

Enhance performance

  • Improve targeting of performance within an agreed risk framework
  • Manage downside risks
  • Optimize portfolio growth while maintaining targeted spend

An in-house investment team or CIO can leverage the resources of PFaroe to provide a powerful framework within which performance can be optimized while managing the impact of downside risk on an endowment’s corpus and spending needs. Depending on how the organization measures success, a risk framework can be defined in terms of objectives relating to spending goals, portfolio real value and performance relative to a policy portfolio, among others.

CIOs can test policy portfolios and optimize fund strategies and managers, employing a number of techniques from “What if?” scenario testing through to powerful stochastic modelling using a sophisticated economic scenario generator.

Alternative investments are included for a holistic view of the portfolio. Multiple types of spending formulae are built in, which, together with the asset inputs, automatically produce a comprehensive suite of spending, asset and risk analytics, allowing CIOs to test investment solutions from multiple perspectives. Developments in technology and methodologies since the financial crisis allow PFaroe to offer sophisticated modeling that was previously beyond the reach of only the largest endowments and foundations.

Capitalise on market opportunities

  • Be more responsive to market dislocations
  • Quickly review new managers or investment strategies
  • Devise investment strategies responsive to market events or economic scenarios

CIOs are empowered through real-time analysis, allowing them to react far quicker to investment opportunities and market dislocations. Strategic plans can be evaluated and implemented to deal with different market events.

For example, in the event that the endowment’s value or spending falls below a certain level, PFaroe can help map out the best investment strategy going forward.

PFaroe is nimble and interactive, providing the CIO with a competitive advantage over peers, strengthening the value proposition of the in-house team.

Deliver operational efficiency

  • Speed up the Board reporting cycle
  • Focus on managing the portfolio and not number crunching
  • Improve response time to stakeholder queries
  • Automate tailored reporting

PFaroe’s regular, easy-to-access analytics allow CIOs to monitor and report on their investment portfolio and risk efficiently and effectively. Asset allocation exercises become less cumbersome. Seamless ex-ante analytics can be applied to test new managers or fund strategies. Monitoring and reporting on portfolio risk and spending implications can be performed more frequently and seamlessly.

PFaroe’s reporting capabilities are powerful and comprehensive, providing a potential platform for front-to-back reporting needs. PFaroe can generate impressive tailored reports for monthly/quarterly Board reporting requirements, on-demand and at the click-of-a-button.

Improve governance and mission delivery

  • Avoid surprises and costly mistakes
  • Inform discussion with fund managers and external advisors
  • Access better analytics over in-house models
  • Improve budgeting at the CFO level

PFaroe shows the likelihood of endowments or foundations delivering on their mission through deterministic and stochastic projections of their portfolio’s spending contribution to the organisation’s budget.

The CIO is empowered by illustrating the direct impact of investment decisions on these financial goals. Gifting patterns and capital campaigns can be incorporated to provide the organisation with more confidence in budgeting and mission delivery.

Disparate systems and services can be rationalised through implementation of PFaroe, saving time and money, while manual intervention is eliminated, improving security and minimising the risk of errors.

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