LOAN TO VALUE
Our firm was established in 2008 with an initial request: to determine loan to value ratios for a renowned Swiss private bank. In response, SwissAnalytics developed a comprehensive due diligence methodology to assess both qualitative and quantitative aspects of investment funds and their managers.
Over SwissAnalytics’ history, our firm has adopted a consistent approach to due diligence. First, SwissAnalytics has always worked on the buy side, providing services only to investors and their gatekeepers. Second, we believe that the risk oversight function of an effective due diligence program – and the professional skepticism of the due diligence practitioner – should be segregated from the advocacy role of an investment adviser. SwissAnalytics does not recommend funds for investment, build portfolios or offer investment management services. These values are shared with Castle Hall, and were a vital foundation to the fit between our two companies.
The initial loan to value framework was further refined to become a 220+ factor matrix, using a detailed scoring methodology supported by an in house tool – Ramses. Ongoing development of the Ramses platform added client web interfaces for document management, peer group analysis, and portfolio reporting.
“It should be noted that the current values are a reflection of optimistic assumptions rather than based on conservative discounts and the existing positions might be subject to significant future write-downs.” SwissAnalytics 2012 report; fund manager was subsequently subject to SEC enforcement action.
Due diligence is not solely an exercise limited to fraud detection. However, during our history, SwissAnalytics’ approach to due diligence – combining both ops and investment factors – was validated on several occasions. We provided negative feedback on funds which subsequently encountered regulatory or legal problems, resulting in material financial losses to those investors who did not conduct effective diligence.