Railpen selects Axioma tech to model portfolios

Railpen, the investment manager for the Railways Pension Scheme, one of the UK’s largest and longest established pension funds, has selected the Axioma Portfolio Optimizer solution to model portfolios and risk tolerence for the roughly £27bn (€29.8bn) of investments it oversees for its 350,000 scheme members.

The implementation follows the identification of a need to acquire an optimising solution that could integrate with existing proprietary data and optimisation models used for the quantitative equity strategies. In effect, Railpen required a hybrid setup, according to Tony Guida, senior investment manager at Railpen.

Sunil Rajan, managing director of International Sales at Axioma, added that technology solutions increasingly need to respond to a shift by investors towards diversified portfolios that combine smart beta strategies with passive ones.

Added Guida: “The Axioma Optimizer is central to our research and portfolio construction, the conception and the design of the library is perfectly suited for a hybrid set-up and allows us to improve our optimisation models for quant equities.”

Railpen’s investment strategy is structured to meet the demands of some 100 ‘sections’ of the overall scheme, each one of which needs to meet particular investment objectives depending on factors including the strength of the sponsoring employer, whether a particular sector is closed to new members, and what proportion of pensions are already being paid out.

ABOUT THE AUTHOR
Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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