Data Analytics Giant SAS Expands Financial Risk Offerings, Expertise With Acquisition

SAS has acquired Hawaii-based Kamakura, a provider of advanced financial risk analysis and management software, to expand its portfolio of analytical applications for the financial services industry.

Data analytics and AI technology giant SAS has acquired Honolulu-based Kamakura Corp. in a move that will expand its reach within the financial services industry and broaden the SAS portfolio of financial risk management software.

The acquisition comes as SAS, one of the leading companies in the data analytics and data management arena with annual revenue of more than $3 billion, continues to ready itself to go public by 2024.

The acquisition also comes at a time of economic uncertainty, high inflation and supply chain disruptions that is leading financial service providers to closely scrutinize the liquidity and other risks of their investment portfolios.

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SAS said that in acquiring Kamakura, the company “aims to deliver an unparalleled suite of integrated risk solutions,” particularly around asset liability management, and serve additional areas of the financial services industry.

“This acquisition is an extension of tremendous investments already made in SAS’ cloud-ready risk management platform and integrated solutions,” said SAS co-founder and CEO Jim Goodnight, in a statement. “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,” Goodnight (pictured) said.

Terms of the acquisition were not disclosed.

SAS has for years developed and marketed a comprehensive portfolio of risk management analytical applications for customers in financial services, including the banking and insurance sectors.

Kamakura, founded in 1990, offers specialized software, data and consulting services that financial organizations, including banks, insurance companies, financial asset managers and pension funds, use to manage a variety of financial risks, according to SAS.

Kamakura Risk Manager (KRM) is the company’s risk management system for asset liability management, providing transaction-level valuation, simulation, stress testing and cashflow analysis capabilities, according to a SAS statement. The company’s cloud-based Kamakura Risk Information Services is a subscription data service that provides credit risk data and analytics for forecasting credit spreads and calculating default probabilities based on proprietary models.

In addition to acquiring those products and technologies, SAS is bringing onboard Kamakura’s employees and executive management – including founder and CEO Don van Deventer, Research Director Robert Jarrow and Chief Operating Officer Martin Zorn.

SAS said the addition of the Kamakura staff will provide a boost to its expertise in quantitative risk. Jarrow is known in the quantitative risk field for co-developing two prominent risk modeling frameworks: The Heath-Jarrow-Morton interest rate model and the Jarrow-Turnbull reduced-form credit risk model.

In a statement, van Deventer said Kamakura had multiple acquisition suitors, but chose to go with SAS because of the two companies’ “data-driven, research-oriented cultures and their mutual excellence in modeling and analytics.”

“Joining the SAS family represents an exciting new chapter in Kamakura’s 32-year history,” van Deventer said. “In combination, our like cultures will produce synergies that fuel customer and marketplace innovation. More concretely, adding SAS’ cloud-native Viya technology [SAS’ flagship business analytics software], risk domain capabilities and intuitive, user-friendly interfaces to Kamakura’s IP will spawn a top-tier, market-changing ALM offering.”