Invictus Consulting Group has created a bank stress test service for hedge funds that rates the valuation of bank stocks in relation to their peers. It also stress tests banks’ Tier 1 capital reserves two years out. By comparison, banks’ stress tests are handled in house, Invictus noted.
“Hedge funds rely on complex algorithms that, in turn, depend on public data to value their bank stock holdings,” said Kanal Mustafa, chairman and CEO of Invictus. “The problem, we have found, is that the source data for these algorithms, particularly the key ones of capital and earnings, are incorrect as generally presented and must be adjusted on a correct and consistent basis across all the banks to make the data useful. Our proprietary methodology provides the means to do this accurately, efficiently and quickly.”
The service provides individual reports on banks, screen reports to find banks that fit specific bank stress test parameters and customized reports on a wide variety of investment parameters.