Our Approach
Our approach combines behavioural risk with investment engineering. We measure how investors are likely to respond to gains, losses and uncertainty, then engineer portfolios with clear payoffs or defined outcomes, setting out the range of results in advance. This is the basis of payoff investing: an investor who knows what a portfolio is built to deliver is better placed to hold it through difficult markets. Our research tests each step, from how behaviour affects realised returns to how payoff structures change the path of returns.
Our Research
Our research measures the return an investor can actually hold. In Nigeria we profile attitudes to risk through FREBO, our behavioural profiling engine, and measure the gap between the returns mutual funds publish and the returns their investors keep. Our working papers define the behaviourally realisable return, treat the point at which an investor abandons a strategy as a limit on the paths a portfolio can take, and test whether products designed around behaviour create more value than they cost to build. Each study is published in full on our Research page.
Read our research