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Raedel Financial Solutions Inc
In June 2001 Foresite was approached by US based company Raedel Financial Solutions, a provider of web-based financial tools that are used by corporate management, mutual fund managers, investment bankers, analysts, and other decision makers to analyse complex financial data.
Foresite and Raedel entered into a long term partnership where Foresite was to develop all of Raedel's internet based tools for a minimum of two years (a partnership which has since been extended beyond this initial 2 years).
The Challenge
The first stage was to develop "Relative Valuation" for the American life insurance industry. Relative Valuation is an ambitious and complex internet application that holds the financial data for all of the American life insurance companies for the past seven years (over 15 Gigabytes of raw data), and contains tools that allow users to analyse this data in a number of ways, including:
- Historical reports - items like balance sheets, five year income reports etc.
- Trends, ratios and growth rates.
- Ranking and comparison - where companies can be ranked alongside their peer group based on over 150 criteria.
- Statutory valuation - where the system creates a complex model of the future valuation and growth of a company over up to twenty-five years based on the user's assumptions.
- Relative valuation - where companies can be ranked against their peer group based on their future valuations.
- Relative valuation to GAAP conversion - tools that allow user to convert the relative valuation output to GAAP (Generally Accepted Accounting Principles).
Once the analysis has been run, the system will dynamically generate PDF or Excel files for the user to download.
There were a number of complex issues involved in the development of this system. We firstly needed to be able to translate the many thousands of functions and equations that are used as part of the modelling process into code that the system can understand. Another issue was how to perform the hundreds of thousands of calculations that would have to be performed as part of the analysis without excessively slowing the system down.
The Solution
The first issue was solved by creating an interface that allowed Raedel's actuaries and financial experts to input functions and equations into the system, and that were then translated into machine code. This enabled the users to effectively create, edit and test the models on-online. A custom engine was then created to run these functions against the numbers contained within the MySQL database. To create the reports, we simply had to create templates that contained the function names. The system would then pull the relevant numbers and input them into the templates. Once the reports are built, they are run through a PDF generator and downloaded to the user's computer.
The second issue was resolved by pre-calculating a huge number of figures involved every time any of the functions are changed. This can be done on a separate, off-line, server and then imported into the main live database once it is completed.
The Result
After eighteen months of intense development and beta testing, the first version of Relative Valuation was released. Since then, Foresite has continued to manage and develop the application, adding new user modules and administration functionality.
The result of this large scale project is a system that allows its users to analyse financial information in a huge variety of ways in order to make correct decisions.
The system is now used daily by a number of large, high profile organisations in the US
