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Solutions for Investment Firms

The Problem

MANAGE RISK,

INCREASE YIELD

You need to constantly and efficiently monitor companies in your portfolio for impacts to sales and profitability caused by shifts in the marketplace. And you need the right analysis to inform and produce insight that allows you to confidently make proactive changes to your strategies.

Solution

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Our platform allows you to make better decisions through a deep analysis of your portfolio companies and their products, markets and customers, allowing you to understand the impact of economic shift and shocks and how to adjust to maximize your opportunity.

in Action

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Investment firms are often challenged with understanding how a market will grow under future macroeconomic conditions, such as employment losses, income changes and industry adjustments. The following use case demonstrates how the addedIQ platform can empower investment analysts to quickly assess an industry and forecast future growth patterns. What normally would take hours to assemble and assess, addedIQ’s platform can achieve in minutes.

Evaluating Market Trends

Selecting an industry to explore is simple and trend details are quickly made available to end users. In our example, our investment analyst has selected General Sports Equipment and is interested in the future growth prospects of this industry. Based on historical trends and our future looking forecast models, we anticipate a YOY growth rate of approximately 16%.

 

Household expenditures of $225 per household are also projected to rise.

Market Dynamics Simulation

Our investment analyst is interested in exploring what will happen to this projected growth rate under a range of negative economic conditions that are likely to arise in the coming year. addedIQ’s simulation model allows users to set economic criteria that affect over 1000 simulation runs. These simulations allow our investment analyst to explore the effect of various macroeconomic shocks on industry growth.

 

For the first model, our analyst assumes incomes will fall by 10% on average, due to the fallout of the pandemic.  

Household expenditures of $225 per household are also projected to rise.

 

Scenario 2 - Rising Rents

Another scenario that our investment analyst wants to explore is the expected effect of rising rents on the market. Executing AddedIQ’s simulation model, our analyst discovers that a rise of 11% in rental prices will lead to a similar contraction in the market, reducing expected growth to 0.03%

Conclusion

After running several simulations, our investment analyst can confidently return to his advisors and conclude that the short term effect of either a rental rate increase of 10% or income reduction of 10% will yield stagnation in market growth. AddedIQ’s simulation engine makes it simple to model a range of additional scenarios and quickly return to investors quantified market risks.

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