CASE STUDY

NEW MEXICO’S SIO EMBRACES A WHOLE PORTFOLIO VIEW

Key points

  • 01

    The business

    The State Investment Office manages the state’s permanent funds, spanning $26 billion in public and private assets, for the citizens of New Mexico in order to maximize distributions to the state’s operating budget while preserving the real value of the funds for the future generations of New Mexicans.

  • 02

    The challenge

    The SIO was reliant on multiple solutions and providers for insight and analyses into individual public and private asset classes, as well as for help managing total portfolio risk at an aggregate level. The use of disparate solutions presented challenges to the team’s ability to swiftly derive actionable insights and make investment decisions.

  • 03

    The solution

    With Aladdin Risk and eFront, the SIO now has comprehensive and granular investment data across public and private markets on one integrated platform for the first time, enabling the SIO to build a robust risk framework, run proprietary scenario analyses, perform stress testing and generate reliable analyses to drive investment decisions.

Quotation start

Aladdin has the competitive edge in private asset class modeling, which can largely be attributed to their acquisition and integration of eFront, the world’s leading end-to-end alternatives investment management software and solutions provider.

Quotation end

The case for a whole portfolio view

New Mexico’s State Investment Office manages the state’s permanent funds for the citizens of New Mexico. With $26bn of assets under management in an endowment spanning $18bn in public and $8bn in private assets, the New Mexico SIO used multiple vendors and manual processes to maintain oversight of their portfolios including risk and performance analysis.

Everyday tasks and analyses as well as more structured, periodic reporting requirements for Council meetings frequently relied on third parties and substantial internal efforts for aggregation of appropriate data to derive actionable insights to portfolio exposures, risk, stress testing and scenarios.

With Aladdin Risk and eFront, the SIO has an all-in-one, integrated solution that provides actionable insight into the whole portfolio. Aladdin focuses on bringing the data together, enabling the SIO to more efficiently analyze, oversee, and manage the total portfolio, and to put in place a comprehensive risk management framework across asset classes and managers. In turn, this will provide the SIO with the ability to autonomously understand portfolio exposures and risk, performance, asset allocation, stress tests and scenarios in a timely manner, leading to more confident investment decisions and facilitating a streamlined governance structure.

Aladdin’s competitive advantage

The SIO monitored the market for integrated risk systems and periodically conducted thorough reviews of specific products over the course of a decade. While several asset-class specific systems were deemed to be of adequate quality and reliability, interoperability across systems remained a concern.

The SIO determined that Aladdin’s capabilities offered a competitive advantage providing a comprehensive multi-asset investment solution and operating system for its publicly traded equities, fixed income, private equity, real estate and real asset portfolios. Eliminating the need to coordinate several specialized but fragmented solutions, Aladdin provides an integrated platform addressing the needs of diverse user groups across the organization. Aladdin provides high-powered tools and analyses for professionals ranging from investment specialists requiring detailed asset-level data, to executives seeking aggregated views of the portfolio across managers and asset classes, driven by the same high quality data.

WHY ALADDIN?

The SIO implemented Aladdin based on the following features and services:

    • Aladdin’s quality control processes facilitate complete and accurate data, enabling SIO teams to focus on analysis and oversight rather than manual data aggregation and normalization.
    • Aladdin will maintain the data management in partnership with the SIO’s custodian and GPs to source data across public and private markets.

  • On Aladdin, the SIO will benefit from having the entire fund on one platform, unifying teams across the organization by providing a consistent view of risks and returns across asset classes and minimizing the need to aggregate data manually from multiple sources.

  • Aladdin’s risk models are fully integrated across all asset classes allowing for a holistic view of the organization from the top down and the bottom up. These models include market driven scenarios and provide:

    • Exposures and sensitivities, factor risk, stress testing and liquidity highlighting impact within and across asset classes

    • Access to tools for interactive analyses

    • Ability to export analytics for use downstream

  • The Aladdin team offers a “One BlackRock” partnership approach to relationship management providing a dedicated client service team with industry and asset class experience, and the latest innovation across thought leadership and technology.

  • Aladdin offers the same technology and intellectual capital that BlackRock uses to manage investments day-to-day. BlackRock’s unique user/provider model brings a practitioner’s perspective to Aladdin and ensures a continued investment in Aladdin’s best-in-class capabilities.

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