INTERNAL PREVIEW · Confidential · For client review only, not the final design.
Built For / Portfolio Managers

Portfolio construction on a risk-adjusted basis.

PROMS Investor positions every asset in risk-return space, quantifies diversification, and identifies which assets to sell, not just which assets deliver the highest expected return.

Most relevant products

PROMS Investor · PROMS Enterprise

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The Problem → The Solution

CRE portfolios are built to maximise return. Risk is managed separately, if at all.

Each challenge is matched directly to the PROMS capability that addresses it.

Industry problemPROMS solution
01You can estimate IRR but not its volatility.Without a stochastic model, CRE assets cannot be compared with each other or with other asset classes on a risk-adjusted basis. Portfolio construction defaults to expected return, which is the weaker half of the decision.
PROMS solutionRisk-return positioning against the market line.Every asset plotted by 5-year IRR against standard deviation of returns, against a risk-neutral line calibrated to the market. Direct comparison with equities and gilts. Assets above the line earn their risk premium.
02Disposal decisions are made on return grounds alone.An asset that reduces portfolio IRR by 3bps but cuts volatility by 9bps ranks 4th best on a risk-adjusted basis. Without this analysis, it stays in the portfolio reducing risk-free equivalent return.
PROMS solutionMarginal contribution analysis.Every asset analysed for its marginal impact on portfolio IRR and portfolio volatility. The largest asset reducing return and increasing volatility simultaneously would increase RFER by 53bps if sold.
03Argus files don't translate to a portfolio-level view.Individual AE models sit in disconnected folders. Moving to a consistent portfolio risk-return view requires an import layer that handles complex US-style expense recovery agreements.
PROMS solutionArgus Enterprise portfolio import.XL4ADW files imported individually or in bulk with overwrite, snapshot or merge options. Full support for complex US-style expense recovery agreements. Data validation runs at two levels before analysis begins.
Risk-Return Space

5-year IRR vs. Standard Deviation

Disposing of 4 assets: +56bps IRR, -20bps volatility.

VOLATILITY IRR 0% 4% 8% 12% 16% 0% 2% 4% 6% 8% RISK-NEUTRAL LINE DISPOSE DISPOSE PORTFOLIO Disposing of 4 assets: +56bps IRR, -20bps vol
Marginal Contribution

Marginal contribution to portfolio IRR and volatility

Every asset ranked. The right call: sell the assets that reduce return and increase volatility.

5-YEAR IRR PROBABILITY OF ACHIEVING ≥ IRR 0% 25% 50% 75% 100% -4% 0% 4% 8% 12% 16% 20% 8% HURDLE 82% 1-IN-20 IRR ~1.5% 1-IN-100 MEDIAN ~10.5% Cumulative probability 1-in-20 1-in-100
Relevant Products

Built for portfolio managers.

Portfolio risk-return optimisation

PROMS Investor

Risk-return positioning, marginal contribution analysis, diversification quantification. Built for portfolio construction.

Explore PROMS Investor →Portfolio cashflow & reporting

PROMS Enterprise

Portfolio-level DCF, cashflow forecasting, and reporting. Argus Enterprise import included.

Explore PROMS Enterprise →

See PROMS Investor on your portfolio.

A walkthrough calibrated to your portfolio strategy, mandate and reporting cycle.

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