Axioma: Innovation and Flexibility in Enterprise-Wide Risk Management

Mar 10 2016 | 8:44pm ET

Editor’s Note: If the last several months have taught alternative investment industry professionals anything, it is that managers must understand risk at a truly macro level, i.e. an aggregation of risk across asset classes, markets, currencies, liquidities and structures. Fresh off the acquisition of the regulatory and risk-reporting units of ConceptONE, the team at New York-based Axioma offers a robust suite of integrated portfolio construction, analytics, risk modeling and optimization tools that help clients create and model portfolios as well as obtain timely, consistent and comparable views of risk across both the entire organization and multiple asset classes. 

Company name: Axioma

Locations: Headquartered in New York with offices in London, Hong Kong, Frankfurt, Paris, Singapore, Chicago, Atlanta, Geneva, San Francisco, Tokyo, Melbourne

Website: http://axioma.com/

Fintech Sector(s): Risk Management and Portfolio Management Solutions

Elevator Pitch:  Axioma is a leading provider of flexible and innovative risk solutions for financial institutions worldwide.

Year Formed: 1998

Stage: Not disclosed

Tell us a bit about your company and what it does?

Axioma offers a comprehensive suite of cloud-based portfolio construction, risk-management and performance-attribution software and content products that help front and middle office functions at buy-side investment firms align their view of risk 

The investment environment has become increasingly complex and competitive, and Axioma is laser-focused on building solutions that can keep pace with the industry’s constantly evolving state of risk. The explosion of quantitative research and analysis methods over the last decade, enabled by access to high performance, low-cost computing power and storage, has opened the door for innovative market entrants like us to win market share from incumbents through customizable, unconstrained solutions that empower our clients to fully implement their proprietary strategies and ideas. 

Axioma Portfolio, our fully integrated suite of portfolio construction, optimization and analytics tools, was launched in 2000, while our Axioma Risk enterprise-wide risk management system debuted in 2013. 

How is Axioma different from other companies in the same space?

Flexibility and innovation. These two qualities have been central to Axioma’s value proposition since our inception, and they have set the firm apart over the years. Post-crisis, the Axioma difference is more apparent than ever, as investors confront a symphony of new challenges such as commoditized performance, downward fee pressure, tighter regulations and rising compliance costs. The resulting proliferation of new asset classes and instruments promising portfolio diversification has in turn created an even greater need for flexible risk solutions, like ours, that can keep pace. 

In response to this need, Axioma entered the multi-asset market with Axioma Risk, which combines simulation-based and factor-based approaches to risk management to help clients obtain timely, consistent and comparable views of risk across the entire organization (front and middle office) and asset classes. And since our solutions have the flexibility to easily accommodate new asset classes, we’re optimally positioned for continued growth in multi-asset class investing. 

What is your revenue model? How will the company make money?

Axioma uses an enterprise software licensing model

Who is your target market?

We serve over 200 leading buy-side investors, including asset managers, asset owners, and hedge funds, and sell-side institutions worldwide. Due to the inherent flexibility of our solutions, Axioma is able to cater to the needs of firms of all sizes. 

How big is the opportunity? 

While the size of equity optimization market is between $200-250 million, the size of the multi-asset class, or enterprise, risk opportunity is estimated to be around $1 billion and growing, representing the next frontier of growth for Axioma. 

 Why are you and your team capable of succeeding?

Axioma brings together some of the best minds in science, software engineering and research to deliver innovative, next-generation risk management and portfolio construction solutions with the flexibility necessary to accommodate the product innovation and regulatory changes that are continuously reshaping this industry.

What is your company’s next target/milestone?

Axioma’s has an established reputation as a leader in the equity portfolio construction space, and since we’re the only company leveraging both fundamental factor and granular approaches in the multi-asset class risk space, we’re positioned to capture significant market share from competitors. 

To achieve this goal on a global scale, the company continues to invest in organic and inorganic growth across three geographies: North America, EMEA and APAC. Last year, we significantly strengthened our bench of talent and opened new offices in Paris and Frankfurt. This year, we plan to continue this trajectory with the addition of offices in Tokyo and Melbourne.

Can you tell us one unusual fact about your company?

More than 25 Axioma employees hold PhDs


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