PDM – PORTFOLIO DECISION MAKER

The standard solution for strategic asset allocation

pdm – portfolio decision maker is the e.stradis standard software solution for integrated, risk-optimized and return-oriented portfolio management. The solution can be operated independently or in conjunction with modules from rms – risk management suite. The pdm can be used to manage sub-portfolios through to overall bank management. The pdm is therefore an optimal tool for systematically increasing risk/return efficiency.

Based on the business and risk strategy, the pdm supports the

  • Strategic Asset Allocation
  • Management of risk and strategic limit

The pdm determines the optimum portfolio structure on the basis of specified assets and historical price data. It derives recommendations for action for the portfolio on the basis of objective data evaluation using financial mathematics-based key figures.

Using the pdm provides:

  • Identification of realizable risk / profit optimized target portfolios considering your specific business structure
  • Efficient management of economic and regulatory capital
  • Efficient definition of a risk strategy and consistent limit structures
  • Gaining optimized target capital yield (e.g. RORAC and RoE)
  • Avoiding “trial and error” approaches at forecast

pdm provides the following functionality:

  • Analysis of the current portfolio in terms of risk/return ratio
  • Calculation of the efficient frontier, i.e. all possible portfolios with an optimal risk/return ratio through reallocation
  • Determination of the efficient portfolio that matches the constraint (e.g. risk specification by specifying the tolerable loss)

Modules of the pdm

Planning module

> Optimal target portfolios are identified using adequate optimization algorithms and are then translated into operative management guidelines for the local units / profit centers. The pdm determines the efficient border and the current position of the initial portfolio in relation to the line of efficiency.
> The system evaluates standard risk / profit figures, like RORAC or RoE. Those figures are used as management guidelines for the operational business.
> Knowing the optimized portfolios helps to deduct decision guidelines to reach more efficient and consistent risk / profit strategies.

P&L Module

> The implications of the target portfolios on the P/L cash values are simulated by a delta-analysis
> The simulation uses different forecast scenarios which are recorded for each defined asset class
> The refinancing requirements that may arise for the target portfolio are taken into account in the simulation
> Different refinancing variants can be defined down to instrument level

Need optimization?

Would you like to find out more about the functions and performance of pdm or are you interested in a software demo?
Please feel free to contact us!

Contact