There has been an elevated level of interest in sustainable investing over the past few years, especially since the acceptance of “The 17 Goals” by the UN member nations in 2015. This development started a big push for sustainable or impact investing, and subsequently, ESG has become a predominant investment theme in financial markets. There has been a remarkable growth in the number of mutual funds being marketed as ESG funds after 2016. The year 2019 saw record yearly inflows into ESG ETFs, only to be overshadowed by inflows in 2020 which were three times more than those a year…


AI-led Hedge Funds have delivered cumulative returns of 3X the overall Funds universe

A recent analysis by Cerulli Associates, a provider of global asset management analytics, of the assets under management (AUM) and net new flows of Europe-domiciled AI-led funds from 2013 to April 2020 shows solid AUM growth from 2016 to 2019. Notably, the research finds that the cumulative return of AI-led hedge funds was about three-times the overall returns clocked by the hedge fund universe during this period: 33.9% compared to returns of 12.1%. The report finds that European AI-led active equity funds added assets at a faster…


Mr. Omkar Shah is the CEO of a well-known retail chain in India, one of the fiercely competitive retail markets in the world. Although the company had been doing well, Mr. Shah was stressed of late due to slowing profitability and below-par growth in many new branches. He was not been able to pin-point the exact reasons for this decline, despite having all the data and wisdom of the best minds in the sector at his disposal. Enter business intelligence and data visualization. We will get back to Mr. Shah a little later.

Organizations today, have access to massive in-depth…


The current COVID-19 crisis is causing economic as well as social disruptions, and businesses are no exception. Though central banks worldwide have announced various multi-billion-dollar stimulus packages to contain the economic impact, it has still failed to boost investor confidence.

The business leaders today are facing a multitude of challenges in order to control the ramifications of the pandemic. Every business, whether small or large, is facing challenges related to business continuity, risk mitigation, and workforce management. The same is true for PE firms as well, irrespective of the size of the business, whether small firms or global buyout behemoths…


The world is in the midst of the COVID-19 pandemic trying to control the social and financial fallout. The already struggling financial markets have nose-dived due to the world economy coming to a grinding halt. Social distancing is being practiced across the world to flatten the infection curve and give the government and administration a fighting chance. Pharma companies are working tirelessly to develop the vaccine, which is estimated to take about 18 months for it to hit the markets.

History shows us that humans have been through multiple pandemics and every time we emerge stronger we adapt to the…


The Indian banking industry is undergoing a radical change driven by intense competition from new entrants in the industry, continuously evolving regulatory environment and the changing business models. Technological advancements and innovations have further altered the business landscape for all financial institutions, whether banking or non-banking.

Along with technological changes, the industry is also witnessing a demographic shift in customer interactions. The entry of global players in the banking industry has further propelled the customer expectations.

Therefore, banks are searching for ways to gain a distinct competitive advantage which will set them apart from other players in the industry.

The…


Big Data and Advanced Analytics have become a significant source of competitive advantage for many industries. However, a closer look shows that apart from a few innovative private equity firms, most have been slow to adopt the big data approach when compared to hedge funds, banks, and other financial market participants.

We have observed that partners at private equity firms have a notion that these technologies are only helpful for high-frequency traders and quant funds. However, forward-looking PE firms have put data and advanced analytics to good use to derive competitive advantage.

PE’s Primary Challenge

Every Private Equity firm has…


Asset-backed securities (ABS) and Mortgage-backed securities (MBS) are two important types of asset classes within the fixed-income sector. ABS is created from the pooling of non-mortgage assets while MBS is created from the pooling of mortgages that are sold to interested investors.

MBS can be further bifurcated to Commercial Mortgage-Backed Security (CMBS) and Residential Mortgage-Backed Security (RMBS)

The CMBS is a type of fixed-income security collateralized by commercial real estate loans. These loans are given typically for income-generating real estates such as office buildings, hotels, malls, apartment complexes and factories. A CMBS provides liquidity to real estate investors and commercial…


Retail banks generate value through a mix of businesses like financing, investing and by doing financial transactions for their customers. Banks have been offering basic banking services for free and charging an attractive margin in other areas like credit card fees and foreign exchange transactions. On an average 59% of the bank’s earnings come from fee-based products and services like advice on payment, origination, sales, etc. which forms an important part of the banks P&L statement.

There is a growing trend of using data and analytics in the financial services industry. Banks are using Artificial Intelligence and Machine Learning to…


In recent months there has been a spate of news of stress in Indian businesses, both financial and non-financial businesses. Commentators are assigning various causes for the same.

However, in our view, the main cause of this stress is the unbearable burden of astronomically high real interest rates charged by the Indian banking industry, especially private sector banks, to Indian businesses.

The chart below shows real interest rate burden on Indian businesses. The real interest rate for each month is computed as average bank lending rates for the previous twelve months minus average CPI inflation for the same previous twelve…

Decimal Point Analytics

Decimal Point Analytics is a 15-year-old, financial services company providing Research, Data Management Solutions, and Advanced Analytics Services.

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