Products & Services
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PRIVATE EQUITY

PRIVATE EQUITY

Sovereign Wealth Funds/ Pension Funds, Other Funds
Our approaches are to the Private Equity (PE) investments from the angle of risk measurement of the portfolio of holdings. The approaches cover both the determination of beyond value at risk for their portfolio. We execute and supervise different stakeholders in the asset class that will benefit from guidance based on current best practices in the field of private equity risk measurement. Our thought leadership would succor investors to increase their economic value based return and mitigate risk while increasing exposure to the asset class through evolving “best practice” risk measurement practices that endorse benchmarking and regulatory decision process.

Value at Risk (VaR) = (Exposure at Risk) x (Risk)

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TREASURY, HEDGIN...

TREASURY, HEDGING & CURRENCY RISK

Industries : Sovereign Wealth Funds/ Pension Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

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BASEL II & ...

BASEL II & III, SOLVENCY II

Industries :Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

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CAT BOND/ CAT RISK

CAT BOND/ CAT RISK

Industries : Sovereign Wealth Funds/ Pension Funds Reinsurance & Brokerage, Other Funds ]

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SUKUK, ENERGY SU...

SUKUK, ENERGY SUKUK & TAKAFUL

Industries : Sovereign Wealth Funds/ Pension Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

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GOVERNMENT &...

GOVERNMENT & CORPORATE BONDS

Industries : Sovereign Wealth Funds/ Pension Funds, Other Funds ]

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REAL ESTATE

REAL ESTATE

Industries : Sovereign Wealth Funds/ Pension Funds, Other Funds ]

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CLIMATE CHANGE R...

CLIMATE CHANGE RISK & CARBON

Industries : Energy & Finance Ministries, Sovereign Wealth Funds/ Pension Funds ]

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INSURANCE RISK

INSURANCE RISK

Industries : Insurance, Reinsurance & Brokerage ]

Among many items RsRL's core focus is capital models and relevance of regulations like Solvency I or II.
RsRL has delivered a cutting edge design, implementation cycle and governance; on how European or GCC or Asian insurance companies are preparing for the new Solvency II framework at the time of the Congress; and on insurance undertakings operating within the framework of Solvency II and, building upon such an imperative, attempts to establish the connection (if any) between regulating capital levels in times of crisis versus times of abundance.

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Demand analysis,...

Demand analysis, Inventory control & Supply Chain Risk Management

Industries : MANUFACTURING  ]

Supply Chain Risk Management
Demand Forecasting
Currency Risk Measure
Pricing

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ECONOMIC SCENARI...

ECONOMIC SCENARIO GENERATION (ESG)

Industries : Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

As per RsRL's practice line, there are three most significant revisions for the finance and supervision on risk measure:

• CCAR and Beyond - Capital Assessment, Stress Testing and Applications
• CVA if it's centrally cleared
• BIS's new proposition for Counterparty Risk

For the first point the application of all simulated outcomes to probabilistic events led to capital modeling, which eventually helped the development of the concept of economic capital, providing banks with basic tools to assess risk-adjusted returns on capital. Given the central role macroeconomic scenarios play in CCAR and stress testing, we have currently developed an economic scenario generation model (ESG) framework which quantifies loss and revenue for multi-asset classes and risk appetite.

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TELECOM ANALYTICS

TELECOM ANALYTICS

Industries : Telecom analytic ]

R-square RiskLab Telecom practice cell can help Telecom companies to understand and deal with all of these issues, taking an aggressive and comprehensive mathematical approach to controlling both risks and client's total investment risk exposure and it's unforeseen costs or losses.

RsRL focuses on organizations that own or operate:

R-square RiskLab presents an understanding of the nature of risks and the requirements for managing them effectively in the context of Telecom business. RsRL delivers broad risk management services and options that provide creative solutions capable of meeting the evolving needs of the organizations we serve, regardless of the size, nature or scope of their operations.

• Enterprise Risk Management
• Future Loss Control Services
• Risk Transfer & Other Actuarial Analysis
• Safety & Security, Political Risk
• Financial Service Advisory (example: Financial Modeling, Valuation & M&A et al..)

Financial Advisory Services: RsRL's specialized and dedicated team of mathematicians and corporate finance provides a full range of corporate finance services to our clients in the Telecom industry. They possess in-depth sector-specific knowledge and experience and consequently understand the challenges our clients face throughout all of the stages of their business growth cycle, and are committed to helping them to achieve their goals.

RsRL has relevant "Best Practice" experience on Churn Management.

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VALUE AT RISK (V...

VALUE AT RISK (VaR), ECONOMIC RISK CAPITAL

Industries : SWFs, Pension Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

RsRL's question to BIS and other regulatory bodies is: Are present risk measures and capital requirements adequate?

The truth here is that we still do not know. They may be, but we will only know about inadequacy if they are breached. Short of 100% reserves this is the best we can do. The scary thing is the concept of “adequate” capital requirements. If people think such a thing exists then they are simply deluding themselves. “Adequacy” here is a relative concept. Even 100% reserves. depends from leverage. Leverage 15/20 times and even 100% does not make you safe. The risk measure that is in use in the financial industry is Value-at-Risk or VaR. Mathematically speaking this is a quantile at accepted failure level (say 0.1% or 0.5%). The required capital is then calculated in order to have a failure probability lower than the VaR-level. No concern of what happens below that level. This is the same as given a free option to the company. To put it in an extreme way: in case one goes bankrupt, make sure it is a very big bankruptcy. The lower you might get, the higher one can come with the expected benefit. Positive parts and negative parts are in equilibrium. Some have created VaR-like measures which integrate the Tail (or the square of the Tail, etc.) to distinguish the cases as you note. This does give more information, and even can buy one out of the failure at subadditivity. There is a limit, however, to the information content of a single point (or two or three points) on the real line. A complete function (like a distribution function) provides infinitely (literally) more information.

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BENCHMARKING

BENCHMARKING

Industries : SWFs, Pension Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

RsRL has developed with an unique technique to compare existing corporate strategies with a perspective of achieving the best possible performance in new situations, references to the future with "technical benchmarking" or "product benchmarking" based on the quantitative methods.

Few benchmarking areas based on their strategic importance: - Financial benchmarking deals with competitiveness and productivity.
- Investment benchmarking deals with a comparisn to peer companies with alternative investment opportunities.
- Strategic benchmarking involves observing how counterparties compete across industries.
- Energy benchmarking

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ASSET ALLOCATION

ASSET ALLOCATION

Industries : Sovereign Wealth Funds/ Pension Funds, Investment Bodies & Financial Services ]

RsRL provides strategic risk management based dynamic asset allocation structure with two core aspects: Risk-return based funding strategy, and ALM based potential model to capitalize on yield-curve movements by investing bonds or other assets at a time when fixed income structures are in enormously priced.

Dynamic asset allocation can be effective when IRR and LR structured are well defined with funding ratios. RsRL monitors it's time series data model performance and endorse a strong return-seeking asset performance road-map.


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CENTRAL-CVA, DVA...

CENTRAL-CVA, DVA & FVA

Industries : Banking Financial Service, Insurance Reinsurance & Brokerage ]

The applicability of CVA/DVA or markets for CDS etc is in its nascent stage of development in the BRICS countries and also many parts of the world. Some European banks has achieved their goals recently. If the deals are collateralized the DVA is definitely small but in situation of high default correlation it can be still sizable. If not collateralized then it is relevant. If there are little liquid CDS, finding data can be difficult. It's a very complex topic RsRL's acclaimed team members are working on with some important collaborators. RsRL looks at the developments of Basel III as neglecting DVA or at the american accounting standards board recommending it, according to the feelings to clients' portfolios/ contracts etc.

There are pros and cons in the notion of DVA, mostly cons in my opinion, and it's complex to hedge properly. RsRL has created a name already to deal with such problems.

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ENERGY RISK ...

ENERGY RISK & ENERGY MARKET MODELS

Industries : Energy Finance & Commodities ]

R-square RiskLab deals with energy industries on investments and risk management point of view. Fluctuations of Oil & Gas price and volatility of energy markets, complex trading/hedging portfolios (long and short positions) has increased the need for measuring risk at several contexts such as individual contract level, portfolio of contracts level and obviously enterprise (ERM) to sovereign levels.

Understanding the market dynamics and determinants of volatility and risk (e.g. Value at Risk and Expected Shortfall) for energy commodities will therefore be most important for finance & energy sustainability. Global leaders at RsRL, who provide the thought leadership advisory services to mitigate energy risk across business lines.

R-square RiskLab is currently working with energy institutions and market players to produce and present an “ENERGYDAY2030” (which focuses beyond Energy Risk and Investment) in the Gulf & Middle East & Africa (MEA) region. The focus of this presentation is both the examination of risks and opportunities in and around the energy, investment, environment and finance sectors. This affair is a unique opportunity for all involved. RsRL believes that the thought provoking strategic discussion combined with participant interactions will leave all involved with lasting ideas and lasting impressions that will remain useful till 2030.

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ENTERPRICE RISK ...

ENTERPRICE RISK MANAGEMENT

Industries : SWFs, Pension Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

R-square RiskLab helps organizations to adopt an internal model framework of quantitative and qualitative concurrent assignment. RsRL tools are the obvious process to build the baseline for ERM within the organization based on day to day practical guidelines to incorporate sustainability into the ERM process. In order to explore the development of a CRO (or CXO or Board level) risk index which seeks to aggregate the subjective measures of global risk leaders regarding macroeconomic findings & financial market fluctuations.

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LIQUIDITY &...

LIQUIDITY & INTEREST-RATE RISK

Industries : SWFs, Pension Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

In order to build and implement a cutting-edge tool RsRL focusses on the perspectives or questions, such as: 1) What are the Central Banks' expectations regarding Liquidity Risk Management?
2) How to effectively address liquidity risk in the banking & SWFs industry? 3) What are the most commonly used liquidity risk management practices and what are their respective advantages and drawbacks? With these references how RsRL methodologies are "Best Practice" models? How RsRL can implement Liquidity Risk strategies?
4) What are the challenges identified to SWFs or banks’ business models by the new regulatory requirements?

There are two types of liquidity risk
i) Market liquidity, where correct VaR calculations play a major role.
ii) Funding liquidity, where risk that liabilities are measured through analyzing systemic risk scenarios.

RsRL has currently implemented 2014 Nobel Economics Prize winner, Jean TROLE's Liquidity Asset Price Models (LAPM).

On IRR space, RsRL has been a noted speaker and collaborators since last 11 years across locations. IRR means the change of the portfolio value because of changes in interest rate. The old theory spoke about duration mismatch but the definition of duration is not adapted to stochastic behaviour of interest rates. These days interest rate risk and duration are different. Once calculated a good hedge, one can calculate the derivative or sensitivity or delta w.r.t the factors used. In a CIR model this is for instance any yield to maturity (since it is a one factor model).

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COUNTERPARTY �...

COUNTERPARTY & REGULATORY RISK

Industries : SWFs, Pension Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

It’s extreme important today across locations who needs to comply with international accounting systems is the investor, when calculation a counterparty risk adjustment, considers itself to be default-free. This can be either an unrealistic assumption or an approximation for the case when the counterparty has a much higher default probability than the investor.

Investment can be any line of business (such as Energy production or SWFs or Pension Funds). Perspective is that, "debt" can be avoided (theoretically) by using a new numeraire. There are issues since it would need other statistical data. So the absence of the debt volatility is a big missing point. New measure allows using mark to market for the liabilities. In this way the value of the debt becomes a function of the default probability.

In order to create unmatched deliverables RsRL tries to avoid regulatory risk at the beginning (which is at the time of inception of the project), RsRL risk mitigation strategies are through the following domains:

o Assessment of liquidity (mark to market or valuation marked)
o Calculation of Time to liquidation and residual
o Share of portfolio exchange traded versus OTC traded and decomposition in the number and types of counterparties
o Custodial banks, diversification. Incidence and importance of other non-custodial activities and risk to the custodial ones
o Diversification of custodial themselves

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ASSET LIABILITY ...

ASSET LIABILITY MANAGEMENT

Industries :  Sovereign Wealth Funds/ Pension Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

Asset-liability modelling (ALM) is a liability-driven financial risk assessment and asset planning tool used by pension funds & SWFs to help them define the optimal pension or sovereign investment  policy under market uncertainty in a coherent and consistent balance sheet approach. ALM involves developing feasible scenarios of the future evolution of pension fund & SWFs assets and liabilities, given certain assumptions about the mathematical  properties of economic, financial and biometric variables that impact on the evolution of assets and liabilities. R-square RiskLab can help in designing an optimal portfolio of real and financial assets based upon a client-tailored ALM model that is conceived as an overall risk management technique. Based on stochastic processes & simulation based ALM could then be used as a basis for decisions on the distribution of future pension contributions, SWFs asset pools, funding, and indexing or benchmarking levels.

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DYNAMIC FINANCIA...

DYNAMIC FINANCIAL ANALYSIS 2015

Industries : SWFs, Pension Funds, Banking Financial Service, Insurance Reinsurance & Brokerage ]

RsRL has developed an algorithm for DFA that enables the creation of a comprehensive framework to manage enterprise level risk factors. DFA is used in the capital budgeting decision process of a company to launch a new invention and predict the impact of the strategic decision on the balance sheet in the horizon. DFA gives strategy for Enterprise Risk Management (ERM) in order to avoid undesirable outcomes.

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FINANCE & E...

FINANCE & ENERGY WEALTH MANAGEMENT

[Industries : Sovereign Wealth Funds/ Pension Funds]

R-square RiskLab provides technical wealth management solutions for Energy & Finance houses with RsRL tools and “Best Practice” strategies of financial risk planning, investment portfolio analysis. RsRL experts focus High-net-worth individuals (HNWIs), business owners, SWFs and families who have defined (a subjective component) risk appetite and risk tolerance level. RsRL's innovative team members showcase our real life cutting-edge stories of risk mitigation strategies.

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INVESTMENT RISK ...

INVESTMENT RISK & RATING

Industries : Sovereign Wealth Funds/ Pension Funds ]

The relationship between financial variables and distance to default risk varies substantially between asset classes. An important consequence of this is that default probability models based on local and foreign investment data and applied to the exposures those investments will likely misrepresent actual default risk. RsRL has proven "Best Practice" competency to develop most promising state of the art models and methodologies through it's unique style of technical research and knowledge transfer strategy.

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