StatPro Revolution Introduces Australian APRA Standard Risk Measure Computation Solution

SYDNEY, June 15, 2015

StatPro Group plc (AIM: SOG), the AIM listed provider of cloud-based portfolio analysis for the asset management industry, today announced that it has introduced a pioneering solution to compute Standard Risk Measure (SRM), a standard method used by Australian superannuation funds to describe investment risk.

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The Australian superannuation (pension) industry has experienced a high growth rate in assets, totaling $2.05 trillion at the end of March 2015, an increase of 14.3% over a one-year period^[1].  Australia is the world's fourth largest pension market^[2]and provides the country with an enormous pool of investible funds to generate wealth for an ageing population. Employers are mandated by law to pay 'superannuation guarantee' contribution amounts to a designated fund for their employees at 9.5% of their wages. This rate is set to progressively go up and reach 12% by 2025^[3].

The Standard Risk Measure (SRM) provides superannuation fund members with a descriptor to assist in comparing investment options both within and across funds based on the likely number of negative annual returns over the next 20 years.  StatPro's innovative solution will help asset managers and pension funds meet the Australian Prudential Regulation Authority (APRA) requirement and is fully compatible with the guidelines laid down by the Financial Services Council (FSC) and Association of Superannuation Funds (ASFA).

StatPro Revolution computes the SRM value using a forward-looking methodology which can even be applied to funds yet to be traded. For traded funds we calculate the ex-ante volatility using the well-established historical simulation method. Our methodology provides stable risk results as we go beyond the old approach of return based on volatility and correlations as that approach often leads to unstable results.

The APRA SRM tool continues StatPro's rich legacy of introducing 'first-in-the-market' risk solutions, as we did previously with liquidity risk and an award-winning Risk Limits and Commitment Leverage Monitoring module that helps with UCITS and AIFMD compliance.