Marcuard Family Office, one of the largest European family offices, has signed up to use the Dynamic Style Analysis system provided by US-based Markov Processes International, or MPI.

The system is MPI’s patented system that allows users to pinpoint how investment returns were made – a very useful quality in guarding against fraudsters.

The family office, an 11-year client of MPI, decided to use its DSA system after a case study into the Madoff scandal demonstrated how DSA can spot odd investment data. Marcuard employed DSA to analyze its own funds, of which the group had complete daily holdings information.

“Our families expect us to utilize the industry’s most advanced tools and technologies to support and enhance our investment process. With just a short stream of monthly returns figures, it is phenomenal what DSA can detect – even in dynamic shifting investment products,” Simon Minder, chief information officer at Marcuard, said.

“Armed with the intelligence of DSA, we have had more fruitful and enlightening discussions with the range of managers we invest client money with, from long-only to alternative managers. Our investment process and decisions are truly optimized with the extension of MPI’s tools across our organization, best fulfilling our fiduciary duty to our clients and ensuring their portfolios are safer and synchronized with their investment goals,” said Minder.

MPI created DSA to overcome limitations of traditional investment analysis, such as an inability to measure “style drift” – a change in the asset allocation of a portfolio that goes beyond what a client wants. DSA was patented in 2009.

MPI is headquartered in New Jersey, with satellite offices in London, Paris, Moscow and Tokyo. It serves more than 300 client organizations globally – including pensions and endowments, sovereign wealth funds, global wealth management firms, investment advisors and asset managers.