Highlighting the growth of SAS in specific solutions for the segment, the acquisition will make it possible to considerably increase the coverage of the portfolio of risk solutions
SAS, a global benchmark for analytics and AI, has acquired Kamakura Corporation, from Honolulu (USA). Privately owned, Kamakura offers specialized software, data and advice that help financial organizations – banks, insurance companies, asset managers, pension funds and more – manage diverse financial risks.
The SAS investment decision reflects post-pandemic optimism still overshadowed by the war, relentless disruptions in supply chains and the end of several financial and social security programs that were born with the pandemic. Rising inflation and the recession loomed like heavy clouds on the financial horizon, signaling possible turmoil ahead – a time for financial companies, large and small, to carefully scrutinize liquidity and other risks in their portfolios.
“This acquisition is an extension of huge investments already made in SAS's cloud-based risk management platform and integrated solutions,” says SAS Co-Founder and CEO Jim Goodnight. “It signals our intention to anticipate market-changing risk solutions to address the key and most pressing challenges facing our financial clients. We anticipate that the resulting strength of SAS technology combined with Kamakura's risk and credit analysis models will prove even more powerful than the sum of its parts.”
With the acquisition of Kamakura, SAS aims to deliver an unrivaled portfolio of integrated risk solutions, especially in asset and liability management (ALM), and to serve other aspects of the financial services industry.
“The synergistic value in merging two highly complementary risk technology portfolios is undeniable to anyone familiar with SAS and Kamakura; it's like putting the pieces of a jigsaw together,” says Sidhartha Dash, Research Director at Chartis. “Combining the strength of Kamakura – robust ALM and interest rate risk capability, sophisticated proprietary credit models and risk data – with SAS’ award-winning capabilities in credit risk management and financial and risk integration into SAS® Viya® is a powerful combination for balance sheet solutions.”
a unique view
Kamakura is known for pioneering vision and quantitative rigor. For more than three decades, the company has specialized in risk management software and data for the banking and insurance industries. The two current offers are:
- Kamakura Risk Management (KRM). KRM is among the most advanced and fully integrated risk management systems for ALM available on the market. The software offers transaction-level assessment, simulation, stress testing and cash flow analysis.
- Kamakura Risk Information Services (KRIS). A cloud-based software-as-a-service (SaaS) offering a data service subscription that provides credit risk data and analytics that help companies and countries predict credit margins and calculate default probabilities based on proprietary models.
The acquisition brings the capabilities of these solutions to SAS, along with Kamakura's executives, leadership team, employees and suppliers – a considerable accumulation of quantitative risk expertise that would take years to gather in today's market.
Two sides of the same coin
Kamakura chose SAS precisely because it aligns with its data and research-driven culture and mutual excellence in modeling and analytics, according to Kamakura CEO and Chairman Don van Deventer, who founded the company in 1990.
He says SAS and Kamakura share the same philosophy, which successfully manages financial risk while optimizing returns and meeting regulatory requirements, delivering industry-leading research, solid analytics, fully integrated applications, flawless execution and quantifiable results.
“Joining the SAS family represents an important new chapter in Kamakura's 32-year history,” says van Deventer. “Together, our cultures will generate synergies to fuel innovation for customers and markets. In more concrete terms, adding SAS Viya's cloud-native technology, risk-domain capabilities, and intuitive, easy-to-use interfaces to Kamakura's intellectual property will generate a world-class ALM offering that will change the market.”
Alongside van Deventer, acclaimed author of four books on risk, Kamakura's leadership includes director of research, Robert Jarrow, renowned in the field of quantitative risk for co-creating two prominent risk modeling frameworks: the rate model. Heath-Jarrow-Morton interest rate model and the Jarrow-Turnbull reduced-form credit risk model. Both van Deventer and Jarrow, along with Kamakura COO Martin Zorn, will join the SAS team to ease the transition and lead the future development of ALM and integrated balance sheet offerings, and other advancements in risk solutions.
“The traditionally fragmented management of assets and liabilities and balance sheets in financial organizations is becoming cost prohibitive and unsustainable,” says Troy Haines, senior vice president and director of risk research and quantitative solutions at SAS. "Extending and combining SAS' decades of experience in risk management and financial solutions with Kamakura's advanced ALM capabilities is the best way to sustain the industry's risk regulatory burdens and drive data-driven decisions."
