Moody’s Corporation, the parent company of Moody’s Analytics and Moody’s Investors Service, has acquired RiskFirst, a UK-based risk analytics platform servicing the buy side. It is part of an effort to provide a unified risk management platform for all participants within the buy-side community, most notably, pension funds, says Andy Frepp, managing director at Moody’s Analytics.

“We understand the problems that many of these asset owners have that are very similar to insurers’ problems,” he says. “We also understand the interaction between the asset side and the underlying liabilities in this long-term cash flow world that these kinds of institutions are in, what the problems are and how we can solve them.”

As an example of one of those problems, Frepp points to pension funds, which are currently having to adapt and optimize their asset strategies. “For many years, those pension funds have not had to think about that because they’ve been accumulating assets. But they’re all moving to a point where they’re going to [lessen their] assets and start to pay out,” Frepp says. As a result, risk management has become a pressing issue for these types of funds.

Where RiskFirst comes in is with its PFaroe platform, which launched 10 years ago and supports more than 3,000 pension plans and about $1.4 trillion in assets. In the last few years, the company has added support for other types of funds such as endowments and foundations, and has been increasingly moving into the front offices of investment managers to help them better structure solutions and interact with clients, adds Matthew Seymour, CEO of RiskFirst.

The company predominantly services UK funds, and US funds to a lesser extent, but Seymour says that’s exactly why this deal makes sense.

“The global scale of Moody’s is going to help us push that core platform much more broadly,” Seymour says. “We have some new products that we’ve launched in the last few years, and I think Moody’s is going to help us push those out over the next few years so we’ll end up with a platform that really is all the way from the asset owner to the asset manager across those specific financial verticals.”

Last year, RiskFirst launched a fixed-income attribution product, which Seymour calls a first step toward providing a full pre-trade decision support system for the front office, and the pair expects to add new enhancements and capabilities to the offering as a result of the deal.

“Moody’s Analytics has a range of capabilities that can be integrated with what RiskFirst has got,” Frepp says. “That can range from economic forecasting all the way through to ESG-type factors.”

Climate Change Data

Earlier this week, Moody’s also acquired a majority share in Four Twenty Seven, which provides portfolio analytics and climate change intelligence for businesses, financial institutions and governments.

“There’s quite a big demand for analytics that take that into account in terms of understanding portfolio attribution or the risks… and I think we’ll possibly be able to bring that together through these kinds of analytics tools.”