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Applied Research Services Hangs Out Its ShingleAxioma's new Applied Research Services group is open for business, headed by Tony Renshaw. Axioma Advisor talked with Tony about the new group and its goals. AA: We know you are just getting started, but tell us a little bit about the objectives of the Applied Research group. Renshaw: Basically, all our clients—and potential clients—have the same goal: They want better strategies behind their portfolio construction process, and they want to get more value from our products and services. The people we have in the Applied Research group have the experience and know-how to help clients achieve those objectives. AA: What drove the creation of the group? Renshaw: For one thing, the world is changing. The quant world used to be a pretty tight little community, relatively speaking. And it was very much a 'read-the-manual' crowd. With quant approaches and tools now being applied on an increasingly broader level, we're seeing a new kind of client—people who want a faster way of acquiring expertise. And that's our focus. AA: When you talk about 'improving strategies,' what exactly are you referring to? Renshaw: What we're talking about are ways of squeezing risk out of a given strategy, in other words reducing the noise. And there are a variety of ways we can do that using various mathematical frameworks and other techniques. The ultimate pay-off is that clients gain increased confidence in their alphas because they know there's less noise in the strategy. AA: What else is Applied Research up to? Renshaw: We're particularly busy right now because Axioma's two new releases—Axioma Backtester and Axioma Performance Attribution—are starting to hit the streets. On the Backtester, for example, what we like to do is take a client's alphas and back test them using Axioma's tools as a way of showing how we can do better. Granted, clients are often secretive about their alphas, and convincing them that it's worth their while to share them with us can be a battle. But seeing is believing. So we're heavily involved in helping clients get up to speed on both of these new products. We're also involved in testing the products themselves. Because of our extensive experience with clients and hands-on use of the products, we can identify and correct issues quickly. In fact, at least for the moment, helping clients get more value out of our products is a significant part of our work. Take Axioma Portfolio, for example. Clients spend a lot of time updating workspaces—new risk models, new alpha estimates, changes in benchmarks, etc. Obviously, if you are rebalancing, you want to use up-to-date data. And AP has a lot of built-in features that can help clients save time on updates. The latest version of Axioma Portfolio has a new feature where you can construct a workspace one day, come in the next day, press a button, and AP will rebuild your workspace with new data. That's a feature that usually gets a client's attention, because it substantially simplifies their life. Would you rather spend your time testing new strategies and creating new portfolios or updating workspaces? AA: How do clients or prospects hook up with Applied Research team: Renshaw: The best way is to talk to an Axioma sales person. They will be happy to discuss any issues and make the introduction to Applied Research if that's what makes the most sense. |
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