The application of quantitative research and analysis methods has exploded over the last decade. While access to high performance, low-cost computing power and storage enabled this growth, ultimately it was a thirst for new and innovative solutions that drove it.
Nowhere has this trend been in greater evidence than in asset management. Founded in 1998, Axioma quickly emerged as a recognized innovator. From the start, Axioma focused on flexibility. Existing portfolio-management tools often forced investors to adapt their processes and strategies to the idiosyncrasies of the solution itself. Axioma emphasized solutions that users tailored to their own investment and risk-management processes, thus empowering them to fully implement their proprietary strategies and ideas.
Axioma counts among its clients nearly 200 of the world's leading buy-side firms—asset managers, pensions and hedge funds—and offers the most comprehensive suite of portfolio-construction, risk-management and performance-attribution software and content products available in the market today.
Axioma’s success reflects its history as a repeat market disruptor.
2000: THE MOST FLEXIBLE PORTFOLIO OPTIMIZER
In 2000, Sebastian Ceria, Ph.D., then a professor of operations research at Columbia University Business School, was approached by a leading investment bank that was struggling with a portfolio optimization problem. In fact, as Ceria learned, existing portfolio-construction solutions did not incorporate the most advanced methodologies of optimization. With the founding of Axioma, Ceria introduced Axioma Portfolio, a fully integrated suite of portfolio construction, optimization and analytics tools. Despite an entrenched and dominant competitor, Axioma Portfolio won over eight of the top 10 asset managers worldwide and quickly became the industry standard.
2007: DAILY, MULTIPLE RISK MODELS
When Axioma launched its suite of daily equity risk models—including both fundamental and statistical flavors—some in the industry shrugged them off. At the time, risk model vendors provided only monthly updates to their models. Who needed daily models? The global financial crisis in 2008 unequivocally answered that question. Daily views of portfolio risk suddenly became essential to portfolio and risk managers alike. Amid the turmoil of the crisis, Axioma stood alone in the industry as the only provider offering both fundamental and statistical daily risk models.
2011: CUSTOMIZABLE RISK MODELS
In the past, custom risk models could only be built by the largest institutions with the deepest pockets. Axioma leveraged its risk model experience to create the Risk Model Machine™, a tool that cost effectively “democratized” access to custom risk models. RMM allowed clients to build risk models specifically tuned to their own investment processes, thus delivering better forecasts of risk. The custom risk models generated by the Risk Model Machine avoided undesired risk exposures by allowing clients to achieve enhanced alignment between their risk and return factor models. The Risk Model Machine™ gained quick acceptance in the marketplace.
2013: MULTI-ASSET CLASS RISK MANAGEMENT FOR MIDDLE AND FRONT OFFICE
The introduction of Axioma Risk, a multi-asset class (MAC), enterprise-wide risk management and reporting platform represented a quantum leap forward in risk management. Never before had a risk-management product combined simulation-based and factor-based approaches to risk management, allowing multi-asset class risk managers and portfolio managers to standardize on a common platform. Axioma’s timing was once again perfect. Given the continued emphasis on risk management in the wake of the global financial crisis, combined with the rapid proliferation of multi-asset investing, Axioma Risk’s next generation solution quickly drew the attention of leading asset managers seeking innovative solutions in a dynamic and changing investment environment.
2016: ACQUIRED CONCEPTONE’S REGULATORY- AND RISK-REPORTING UNITS
ConceptONE’s capabilities were integrated into Axioma Risk, enabling clients to generate consistent views of both regulatory and internal risks across the full spectrum of the organization, from front to middle to back office. This timely development further demonstrated Axioma’s leading-edge approach to developing enterprise-wide investment risk management solutions.