US-based TIAA’s investment arm is ramping up its Asia presence after posting a record regional inflow of assets this year, its global CEO and Asia head tell AsianInvestor.
ôHaving been in the risk solutions business for the past seven years and a direct user before that for another five years, I've often faced questions about the accuracy of risk models and the instability of mean variance portfolios selected with them,ö dÆAssier says. ôIn fact, most advanced users of risk models use more than one risk vendor to deal with this issue of model risk, while others impose constraints on the optimisation problem as a way to prevent non-intuitive and concentrated portfolios.ö
Outside of Singapore, Axioma has offices in New York and Atlanta and will target clients in Asia on the buy-side, with a particular focus on pension funds and institutional asset managers.
dÆAssier says the firm's Asian strategy is based on offering risk management from a different angle. This comprises taking into account the inherent uncertainty of financial data, both with risk models and return forecasts in order to offer a more robust forecast of risk and deliver stronger portfolio performance.
In order to achieve this, Axioma provides a complete suite of open solutions that allows the user to use them in conjuncture with any risk model.
ôAxioma is the only provider offering robust optimisation techniques to its customers,ö says dÆAssier. ôOne way to describe robust optimisation is that it seeks to identify the maximum possible forecast error and then selects the portfolio that best minimizes the risk of making that error.ö
dÆAssier is now looking to bring in more staff around the region, particularly risk management specialists, financial engineers and professionals with an operational research background.
ôThe Asia-Pacific region is made up of a confluence of developed markets (Japan, Australia, Hong Kong and Singapore) and developing ones (Korea, Taiwan, Malaysia and Thailand, etc.). Yet with the exemption of purely domestic mandates, most managers need to manage the region as a whole,ö says dÆAssier.
ôThe level of uncertainty in financial data across these markets is as diverse as the markets themselves, all operating at different stages in the development. Directly addressing this uncertainty in the investment process of regional portfolios is a critical advantage for Axioma and its clients.ö
He first joined Barra in 1998 as sales manager for Asia. Most recently, dÆAssier held the title of president of Barra Japan and executive director of MSCI Barra for Asia-Pacific. In this role, he held responsibility for the strategic and commercial business development in the region, as well as overseeing the operations of its Tokyo, Hong Kong and Sydney offices.
Prior to this position, dÆAssier also held the role of managing director, Asia ex-Japan for Barra International in Hong Kong from September 2000 to February 2003 before taking on the post of president of Barra Japan and vice president of Barra Inc. for Asia-Pacific from Tokyo.
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