ProMS CRE Investor

ProMS represents a significant advance in the management of commercial property investments, at an individual asset and portfolio level. Until now investors have had to rely on cash flow models to estimate future returns which contain so many arbitrary assumptions about the future that it has not been possible to produce reliable analysis on how these assets or portfolios will perform in the future.

By utilising the most advanced simulation-based analysis, ProMS is able to describe the probability distribution of returns and the volatility of returns of an individual property or portfolio over any time period. It is also able to calculate the correlation or diversification of each property's returns with a portfolio of other properties or investment assets such as equities or bonds. ProMS is also able to calculate and rank the contribution of each building to a portfolio's chance of achieving its benchmark returns.

ProMS is a complete front-office system that provides a full suite of analytics for individual property investments and portfolio analysis along with a database to store dynamic property information or it can be integrated into proprietary back-office systems to provide a seamless link between an existing database and ProMS' dynamic modelling tools.

ProMS does not give a single-point estimate of return for an individual property nor does it run a few stressed scenarios but it provides investment managers with a distribution of 10,000 outcomes plus the volatility of those outcomes which is a much more powerful way of understanding long-term value.

Through the structured way in which ProMS treats assumptions, all buildings can be compared on a like-for-like basis thus removing the concern that assumptions built into cash flow models may be different for different properties. Thus for example, Asset Managers can use the model to help determine the effect of offering different lease terms to different prospective tenants whilst Fund Managers can identify the optimal properties to sell or acquire.

ProMS provides better and more transparent information to IFAs and end investors as to the strategies and performance of a fund. At a time when fund managers need to have a coherent message to prevent redemptions ProMS gives a rational and clear analysis of a portfolio's performance. ProMS provides fund managers with powerful tools to test their strategies modelling the impact of adding or removing buildings from a fund to assess the effect on absolute or benchmark performance over any time period.

By using ProMS, fund managers will be able to:

• Select lower volatility assets
• Increase a portfolio's diversification
• Shape the portfolio by selecting or deselecting assets that increase the chance of a fund beating a benchmark or absolute return target
• Measure and manage the return versus volatility trade-off
• Optimise the lease structures of individual assets
• Devise the most appropriate leverage and hedging strategies