Most U.S.-based advisors have probably never heard of StatPro Inc., but if Andrew Peddar, the firm's CEO of North America, has his way, that won't be the case for long. The firm, which was founded in 1994 and listed on the London Stock Exchange in 2000, is known today primarily for its portfolio analysis and asset valuation services. Today, it serves approximately 250 clients in 25 countries. Currently, the majority of these clients are asset managers, brokerage firms, banks, hedge funds, pension funds and other institutional managers.
In a recent position paper entitled, Why a Revolution in Front Office Portfolio Analytics and Reporting is Needed, StatPro calls for a revolution to make front-office portfolio analytics technologies smarter, faster and easier to use by replacing traditional, terminal-based systems with cloud-based platforms, simple reporting and always-on, user-friendly interfaces. It should come as no surprise then that StatPro has just launched a new product called StatPro Revolution, a cloud-based portfolio analytics and reporting solution.
StatPro Revolution provides in-depth portfolio analysis, including performance data, asset allocation data, attribution analysis and risk analysis. It does not replace your portfolio management and reporting software; it supplements it by tracking the performance of your models and providing the research/analytics for those models.
According to Peddar, institutional-quality analytical tools can be complicated and expensive. His firm set out to create a product that delivered quality analytics, but in a concise, consolidated manner that was less challenging to use and cost effective for the advisor. To a large extent, with Revolution, it appears that StatPro has succeeded. By using the cloud as a distribution channel, StatPro is able to offer high-end analytics at a price of $100 per portfolio per month.
The fee is not charged per user, but is instead a firmwide fee, so if a firm has five analysts, or 50, they can all view the portfolio for $100 per month. For a small firm working with a limited number of model portfolios, this pricing is very attractive. When there are a large number of portfolios, or when there are large clients, StatPro offers alternative pricing models.
Kicking The Tires
I recently signed up for a free 30-day trial so that I could try out the product for myself. The trial comes loaded with a couple of model portfolios, an equity portfolio and a fixed-income portfolio, which saves time should you want to try it out yourself.
The application is divided into six sections: Admin, Analysis, Presentation, Publish, Research and Support. All sections are fully operational except the Publish section, which is currently under construction. This section will eventually allow advisors to publish reports to "a private investment network." In other words, this will be a collaborative space or portal. Advisors will grant permission to colleagues so that they can securely connect, view and interact with reports the advisor has created. Once the reports are finished and approved, they can be shared with clients so that advisors can explain in detail how a portfolio was constructed and what factors influenced the portfolio's performance.
The Admin section is where you create your portfolios. In order to qualify for the $100 per month pricing, a portfolio can have no more than 200 assets. If your portfolio holdings exceed that amount, an additional charge applies, but this should not be an issue for the typical financial advisory firm. When you create a portfolio, you create the portfolio settings. You assign it a name and a code. From dropdown lists, you can assign additional attributes such as base currency (there's a long list to choose from), portfolio type (fixed income, balanced, equity, etc.) and a risk-free rate for comparison.
You can also assign a benchmark. You can select a standard one, or you can create a custom one. Market benchmarks are preloaded in the system. Some require a license in order to be used through Revolution. Benchmarks can be total benchmarks, meaning they do not contain the index constituents, or constituent-level benchmarks. The advantage of the latter is that you can run attribution and relative allocation statistics versus members of an index.
You can also set attribution defaults. For bonds, that might be maturity or modified duration; for equities, it might be asset class or sector. You can also set risk defaults (holding period, risk confidence level, frequency for statistics).
Market classifications come preloaded in the system as well. These include security type, asset class, country, region, GICS Sector, GICS group, fund type, fund category, modified duration and more. Custom classifications can be uploaded so that you can slice and dice the portfolios however you want to.
The Revolution platform comes with an extensive database of securities both domestic and foreign. If your portfolios contain assets that are not in the Revolution database, you can create custom securities in order to furnish a complete picture of the portfolio.