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Thematic Intelligence Generates Alpha in an Index Tracking Strategy

How Raise Partner and CID collaborate to help asset managers create high-performing, low-risk thematic investment funds.

At a glance

Raise Partner is a leading independent specialist in investment risk analysis and portfolio optimisation software.

They deliver risk/ESG smart analytics and optimisation models to asset servicers, asset managers, wealth managers, insurers, investment bankers, sales, and advisors.

By leveraging CID’s Thematic Intelligence exposure scores as an additional input to their portfolio optimisation solution, Raise Partner has been able to build higher performing thematic portfolios for investors.

High thematic performance, at low risk.

Optimising a thematic portfolio to ensure high exposure to themes can be extremely financially rewarding.

It’s also highly challenging. Thematic investing has become increasingly popular in recent years, and in a crowded, hyper-competitive market it’s become essential for asset managers not just to keep up with trends but to deliver actual, sustainable investment performance.

To that end, CID and Raise Partner have collaborated to support thematic asset allocation while controlling specific risk and performance measures.

We’ve worked with Raise Partner to establish an investment approach driven by Thematic Intelligence, whereby scores based on an assessment of company theme exposures are fed into Raise Partner’s optimisation tools.

Chart of the optimization process
Picture provided by Raise Partner

Thematic, optimised, backtested.

Theme Exposure now powers Portfolio Optimisation.

Powered by CID’s unique NLP, Deep Learning and Graph technology, ThemeAI maps themes, signals, and events onto entities (like companies and people), and crawls relevant and interesting news for asset managers.

ThemeScape enables portfolio managers to define themes in a self-service, no-code manner, and ThemeScore identifies investable companies and scores their theme exposure, allowing to detect thematic leaders.

Raise Partner Portfolio Optimisation tools integrate those exposure scores to define a universe of companies optimized along various performance and risk criteria – and theme exposure.

To highlight the value added to portfolio construction and optimisation leveraging theme exposure scores, Raise Partner runs backtests over multi-year periods, allowing a straightforward comparison with benchmarks.

Together, Raise Partner and CID enable asset managers to back-test the performance of individual themes across industries and to fine-tune portfolio optimisation along desired fund characteristics.

Illustrative bar chart

Unlock greater performance

Our collaboration with Raise Partner has enhanced the process of constructing thematic portfolios.

For instance, the partners apply an index tracking strategy to demonstrate the strengths and possibilities of combining theme exposure analysis with performance/risk optimization.

Company exposures to innovative and potentially high-performance themes are directly integrated with Raise Partner optimisation tools. A showcase illustrates the construction of a thematic allocation while controlling a specific risk measure.

CID and Raise Partner enrich portfolio construction with theme exposure calculation based on qualitative data and portfolio optimisation capabilities.

Our approach demonstrates thematic asset allocation while keeping performance high is possible.”

Sophie Echenim, CEO, Raise Partner

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