Assessment of Investment Product Profitability (AIPP)

Objective:
To provide a tool that allows to standardize business cases relating to investment funds and portfolio management mandates, while offering scenario analysis features. Integrated into an overall Product Development & Monitoring process, the tool should allow to plan and assess the financial performance of products across their entire life cycle, offering both an individual product and a consolidated portfolio view. Additionally, it should offer the possibility to assess non-financial factors, as, e.g., strategic fit, differentiation potential, risk assessment, etc.

Solution:
AIPP is an instrument designed to complement and support overall product development & monitoring processes of investment product providers from a financial perspective. Its main features include, among others:

• Assessment of existing product range within product monitoring process (e.g., product portfolio analysis, financial KPI‘s, ...) that complements the usual Financial Controlling focus
• Assessment of non-financial factors (scoring system)
• Increased quality of decision making from a financial perspective when assessing new investment product ideas
• Business case framework when assessing product launch or maintenance options, like, e.g., re-pricing or consolidation
• Target setting framework for distribution units when assessing new product ideas
• Highly flexible reporting, as well as standardized graphical output, serving to enhance the quality of decision making

Main value added of AIPP:

• AIPP has been used to assess different alternative investment fund initiatives in a large Swiss Asset Manager
• Due to the assessment, several changes were made to the firm's corporate development
• Financial KPI framework for strategic product portfolio steering
• Transparency and standardization of business cases relating to new product ideas
• Support in decision making across the entire life cycle of a product
• Flexibility to include different types of investment products
• Structured scenario and probability analyses complementing the decision making process
• Highly flexible reporting & standardized graphical output