Financial Software
AdminAid- Administrator’s Aid (1984 – 2004)
Commitment based budget control and purchasing system.
Developed in conjunction with Dept of Biochemistry, Oxford University until the University central office moved to Oracle which would not support it.
It was designed to handle research grants. Biochemistry became the flagship department for grant administration for prospective research investors.
It was adapted for use in The Royal Free Hospital Medical School.
A pilot project was started to link AdminAid to QSA as an experimental accounting system for small builders.
Property Investment Analysis
System to Display Property Investment Potential for Henderson clients
Developed in collaboration with Henderson Investors – included colour coded displays for investment portfdolios by sector, region and date. System was never installed as Henderson was taken over by Australian Mutual Provident before completion.
System to Display CRE Investment Potential for Investment Property Databank (IPD)
This was developed as a prototype to be subsequently rewritten, developed and fully supported by IPD alone. This system included analysis and a colour coded cartographic displays for sector/region investment potential from data selected and extracted from the IPD database. It was fully tested as a fast, efficient, fully functional web-based system.
Property Cash Flow Risk Analysis
Oxford Property Systems and OPRent - Flexible Lease Pricing
This was a joint venture between FSS and Andrew Baum, Professor of Land Management at Reading University, in Commercial Real Estate (CRE).
This software was written in response to a request to address the problem of possible government legislation to outlaw the Upwards Only Rent Review in commercial property leases. It took the form of a generic risk analysis based on probabilistic factors governing the lease events present and linked to a Monte Carlo stochastic forecast for the prevailing economic environment.
It started as a collaboration with the Reading Property Research Group (the leading UK experts in commercial real estate), Dr Alice Robson (a very able statistician) and Pilbeam Ltd. (for web delivered deployment and IT support).
OPRent was extended beyond its original capacity to accommodate the upwards-downwards rent review in order to provide a more general flexible lease pricing system.
Had the government proceeded with its original intention, OPRent would have been unique and monopolised its position within the property industry. When this did not happen, it became clear that the OPRent remit was too tightly constrained to allow it to be extended to tenants, fund managers or more deeply into investment analysis. It operated exclusively within the research departments of the larger landlords rather than the more general requirements of fund management. At one point, OPRent was being used by 8 of the top 10 UK landlords.
When the government dropped its policy, OPS soon found itself with no clients left and it was closed. The ideas on which it was based were reconstituted and extended into a much more intrusive risk analysis for property investment.
Property Risk Analysis with Risk-Return Optimisation
Banking
This system was offered to banks to evaluate the risk attached to loans supported by commercial real estate collateral. The analysis was built around the underlying proposition that the cash flow from the collateral should be able to service the debt and the expected asset value at term should be able to repay the loan or provide a basis for refinancing it.
There was very little interest from the banks, though a start was made with Barclays. The need for this sort of control seemed to be growing, as prolonged financial stability had eroded any interest in serious risk analysis. These shortcomings were all pervasive, extending even to the rating agencies. We explored the possibility of targeting the banks through the Financial Services Authority which was supposed to regulate banking, but to no effect.
It was interesting to note that whereas our primary concern was to find a solution, most analysts who were aware of the problem only tried to capitalise on it.
At the Casino...
"I still say this was much more fun when we were in banking."
Crucial Analytics Ltd (CAL)
After Oxford Property Systems had closed, the residual IP was combined with the new IP being developed to handle debt and fund management and deposited in CAL.
Our approach to property fund management was developed in collaboration with Fidelity International and applied to the management of their new property fund, a completely new departure for them.
In the year that our contract was finally signed, not only did Fidelity then win the Institute of Risk Management award for the best use of risk management in financial services, but they were also managing one of the best, if not the best, performing property fund – and continue to do so. The Fidelity system was used under the name REFRACT, in which a white label version of Crucial provided the underlying analysis.
REDBAR
After the financial collapse, we adjusted the analysis to allow it to pick up some of the pieces as the world was awash with unwanted debt.
In this reincarnation, the analysis was applied to the calculation of the risk adjusted value of debt parcels supported by real estate collateral. The REDBAR proposition was that this analysis would be applied to debt based on the facility agreements supplied and the lease details attached to the collateral CRE. This analysis would be presented as a report which would have to be acceptable to the bank. It was then offered anonymously to prospective purchasers. When a prospect had been found, we would put them in touch with the bank, closing the loop, and then stand aside. This service was offered on a commission basis.
Several banks tried it (RBS, BarCap and others) and it appeared to be very effective. For reasons that were never made clear, it was never adopted. The government policy of quantitative easing to allow the banks to hang on to ‘toxic’ debt rather than dispose of it, stabilised the situation somewhat but did little to speed the resolution of the underlying problem.
Bank of England
When the Band of England took over from the FSA as regulators of the banks, a meeting was arranged through the governor between Crucial Analytics and the Risk Committee. There was a clear interest in what Crucial had to offer but unfortunately, Mervin King resigned shortly after and this dialogue went no further.