RAIIS Blog

RAIIS: Our Journey in Portfolio Innovation

By Rayan Ayari, Founder & Managing Partner January 2024

The journey of RAIIS began during my PhD, which focused on refining computational approaches for portfolio management and integrating machine learning (ML) and artificial intelligence (AI) to enhance financial strategies. During this period, I had the privilege of collaborating on several impactful projects with Nikola Gander, whose expertise and guidance were pivotal to these early successes. Nikola's visionary approach and unwavering support laid a strong foundation for what would follow — and for that, he deserves immense credit.

The demand and overwhelmingly positive feedback from these projects inspired me to think bigger. Recognizing the potential for broader innovation, I reached out to two exceptionally talented individuals to help build something transformative. Doga Alkan, one of the brightest quantitative minds from my PhD cohort, brought unmatched technical expertise and a profound understanding of quantitative finance. Meanwhile, Arnas Erdem, a sharp economist and critical thinker, and Nikola provided strategic insights essential to bridging the gap between quantitative modeling and real-world financial decision-making.

With this exceptional team in place, we set out to develop a comprehensive, strategic approach to building asset management tools that seamlessly integrate into existing workflows. This marked the inception of the RAIIS project.

Building the Foundations: From Vision to Reality

After a year of intense research, development, and iteration, we developed a robust tech stack capable of simulating the entire portfolio management process—from data orchestration to complex performance analysis, and transaction cost assessment. The system is designed to handle both strategic allocation and event-based adjustments, all accessible via a user-friendly web application or custom integration.

At the core of this ecosystem lies our flagship tool: BackGen (short for Backtest Generator). BackGen is an advanced solution that empowers asset managers to conduct comprehensive backtesting scenarios with unparalleled flexibility. Here's what BackGen offers:

Support for fractional and non-fractional transactions
Long-short portfolio strategies
Customizable per-trade volume transaction fees
The ability to integrate custom price series, allocation data, and tailored constraints
Configurable simulation parameters that align with real-world investment conditions
In-depth cost analysis to evaluate the financial impact of various strategies

Addressing Modern Asset Management Challenges

One of the standout challenges we aimed to address is the integration of ESG (Environmental, Social, and Governance) criteria into traditional portfolio management practices. ESG considerations have become a cornerstone for modern investment strategies, yet their implementation often presents significant complexity.

We dedicated substantial time and effort to evaluating how different ESG ratings from various raters impact portfolio allocation strategies across diverse markets. BackGen's capabilities allowed us to:

Construct ESG score-based filtering approaches for different raters and markets
Integrate these approaches into our simulation environment
Evaluate the performance and cost implications of these ESG-based strategies

Expanding Innovation: What's Next for RAIIS

At RAIIS, our primary goal is to deliver practical, innovative solutions that optimize asset management workflows. While the launch of BackGen in 2025 marks a significant milestone, it is just the beginning. We have already pipelined further innovations designed to elevate portfolio analysis, trade execution, reporting processes, and in-depth cost analysis capabilities.

Driving Practical Innovation in Asset Management

Our journey from an academic vision to a practical, cutting-edge platform has been a labor of dedication and collaboration. We are excited to continue pushing the boundaries of what is possible in asset management and to share our insights and solutions with the broader financial community.