Ilmarinen elevates global real estate investment analysis and risk management with ModelTree

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Introduction

Based in Helsinki, Finland, Ilmarinen is a leading Finnish pension insurer managing a broad domestic and international real estate investment portfolio under a multi-manager portfolio management approach. With a diverse mix of direct and indirect property investments and real estate debt investments, Ilmarinen faced challenges in consolidating data from various internal systems and external sources. Seeking a comprehensive solution, Ilmarinen turned to ModelTree to become the central real estate modelling engine for its global real estate portfolio.

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Problem

Before implementing ModelTree, Ilmarinen encountered several operational hurdles:

• Fragmented Data Sources: Investment data was spread across multiple systems including property management, accounting, and budgeting platforms, as well as inputs from various global investment managers and external appraisers.

• Global Cash Flow Model Analysis: The company struggled to systematically build cash flow models from the globally spread portfolios across multiple countries and various investment structures. 

• Manual Data Consolidation: Monthly data updates required manual intervention, which was both time-consuming and prone to errors, delaying timely portfolio and risk analysis.

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‍Solution

Ilmarinen adopted ModelTree to enhance its cash flow modeling processes. Key components of the solution included:

• Automated Data Integration: ModelTree automatically retrieves and consolidates data from Ilmarinen’s internal systems, external valuation models, and data from global managers on a monthly or quarterly basis—eliminating manual data entry.

• Comprehensive Cash Flow Modeling: The platform provides customized modeling for domestic and foreign property investments, as well as for real estate debt investments, capturing the unique characteristics of each asset type.

• Valuation Comparison and Analysis: With built-in capabilities to compare internal DCF valuations against external valuations, ModelTree enables detailed analysis to identify and explain valuation differences.

• Seamless Platform Integration: As the core real estate modeling engine, ModelTree integrates smoothly into Ilmarinen's broader global investment and risk management platform and data warehouse, ensuring a unified approach to risk analysis across the organisation.

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Results

The implementation of ModelTree has delivered significant benefits to Ilmarinen’s investment management process:

• Enhanced Efficiency: Automated data consolidation and cash flow modeling reduce processing time and minimize errors, ensuring timely monthly updates and comprehensive analyses.

• Systematic Global Insights: ModelTree provides both top-down and bottom-up views of Ilmarinen’s global real estate equity and debt portfolios, facilitating more informed and strategic analysis and decision-making.

• Improved Valuation Accuracy: The ability to compare and reconcile differences between internal and external DCF valuations has boosted the accuracy and reliability of investment assessments.

• Integrated Risk Management: With a unified platform for cash flow modeling, Ilmarinen can efficiently monitor and manage risks across its diversified real estate portfolio, thereby enhancing overall portfolio resilience.

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Conclusion

In today’s complex global investment landscape, precise and timely analysis is crucial. Ilmarinen’s adoption of ModelTree has redefined its approach to real estate investment, portfolio management and risk management by automating data integration and providing sophisticated cash flow modeling tools. This strategic transformation has empowered Ilmarinen with a systematic, global perspective on its real estate and debt portfolios, streamlining operations and strengthening its commitment to outstanding investment management. 

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Ready to transform your investment strategy? Automate data integration and optimise cash flow modeling with ModelTree. Contact us today.

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