SAS acquires Kamakura to propel risk technology innovation
Global AI and analytics firm SAS has acquired Honolulu-based Kamakura Corporation.
Privately held Kamakura provides specialised software, data and consulting that helps financial organisations across the spectrum banks, insurance companies, asset managers, pension funds and more manage a variety of financial risks.
SAS investment decision comes as post-pandemic optimism is shadowed by war, unyielding supply chain disruption, and the end of many pandemic-era financial and social safety-net programs. Rising inflation and recession rumblings have emerged as dark clouds on the global economic horizon, signalling potential turbulence ahead a time for financial services organisations large and small to closely examine the liquidity risk and other risks in their portfolios.
"This acquisition is an extension of tremendous investments already made in SAS cloud-ready risk management platform and integrated solutions," says SAS co-founder and CEO Jim Goodnight.
"It signals our intent to advance market-changing risk solutions to solve the most pressing challenges our financial services customers face. We foresee that the resulting strength of SAS technology, paired with Kamakura's risk analytics and credit models, will prove far greater than the sum of its parts," he says.
In acquiring Kamakura, SAS aims to deliver an unparalleled suite of integrated risk solutions, particularly around asset liability management (ALM), and serve additional facets of the financial services industry.
"The synergistic value in the melding of two highly complementary risk technology portfolios is undeniable to anyone familiar with SAS and Kamakura; its like joining matching puzzle pieces," adds Sidhartha Dash, research director at Chartis.
"Merging Kamakura's strengths robust ALM and interest rate risk capabilities, proprietary and sophisticated credit models, and risk data with SAS award-winning capabilities in credit risk management and risk and finance integration on SAS Viya is a powerful combination for solutions across the entire balance sheet."
A singular vision
Kamakura is known for its pioneering vision and quantitative rigor. For more than three decades, it has specialised in software and risk management data for the banking and insurance sectors, currently delivered through two offerings:
Kamakura Risk Manager (KRM). KRM is among the most advanced, fully integrated risk management systems for ALM on the market. The software offers transaction-level valuation, simulation, stress testing and cashflow analysis.
Kamakura Risk Information Services (KRIS). This cloud-based software as a service (SaaS) offering is a subscription data service that provides credit risk data and analytics that help companies and countries forecast credit spreads and calculate default probabilities based on proprietary models.
The acquisition will bring these solutions capabilities into the SAS fold, along with Kamakura's executives, leadership team, employees and contractors a noteworthy accumulation of specialised quantitative risk expertise that would take years to assemble in todays market.
Two sides of the same coin
Kamakura specifically chose SAS over other potential acquisition suitors based on alignment in the companies data-driven, research-oriented cultures and their mutual excellence in modelling and analytics, according to Kamakura chairman and CEO Don van Deventer, who founded the company in 1990.
"SAS and Kamakura share the same philosophy, he said: that successfully managing financial risk, while optimising returns and meeting regulatory requirements, demands industry-leading research, sound analytics, fully integrated applications, flawless execution, and quantifiable results," he says.
"Joining the SAS family represents an exciting new chapter in Kamakura's 32-year history," he says.
"In combination, our like cultures will produce synergies that fuel customer and marketplace innovation. More concretely, adding SAS cloud-native Viya technology, risk domain capabilities and intuitive, user-friendly interfaces to Kamakuras IP will spawn a top-tier, market-changing ALM offering."
Troy Haines, senior vice president and head of risk research and quantitative solutions at SAS, says, "The fragmented and siloed ways financial organisations have traditionally done asset liability and balance sheet management are becoming cost-prohibitive and unsustainable.
"Augmenting and combining SAS decades-long expertise in risk management and finance solutions with Kamakura's advanced capabilities in ALM will better support the industry's computationally heavy regulatory risk burdens and promote data-driven decisioning."