投资组合理论成功应用的5个关键(英文)课件.ppt

1、Five Essential Keys to Successful Portfolio ManagementStuart HarrisThe Dept of Decision Sciences&Modelling DAAG Conference -May 2001 -Houston,TXqOverview of Portfolio ManagementqThe Five Keys1.Corporate Buy-in2.Risk Management3.Revenue Stream4.Efficiency of Investment5.ProfitqSummaryBASIC CRITICAL P

2、OINTS The R&D portfolio is the future of the company.To manage it is to distribute scarce resources across a set of projects as well as across a set of project strategies.Priorities must be established and difficult choices must be made.MANAGEMENT REQUIRMENTS Because of surprises,good management mea

3、ns flexibility.Of critical importance is that senior management understand the principles,the objectives,and the knowledge to make correct choices.THE GOAL The ultimate aim is to create value and to do it over time.If a pharmaceutical does it well,then it will be successful.The optimal portfolio is

4、one which(1)maximises expected value today and into the future,(2)addresses risk(attrition),and(3)optimally distributes resources.SELECTION CRITERIATo qualify as a key,each factor had to meet the following criteria:It had to relate to all R&D projects,not just a subset.Corporate management could ele

5、ct not to pursue the factor.If the company didnt do it(by accident or by design),it would not be successful?This means that both management at all levels and project team members understand and are willing to follow the principles of Portfolio Management.This is key for two simple reasons.Management

6、 -The Decision Making Process is the 1st Step in Achieving Goals and Objectives.Making correct portfolio choices,project strategies,resource allocations,and timings are the responsibility of Corporate Management.Decision makers must understand the nature of decision making under uncertainty as well

7、as the quantitative measures that lead to success.Project Teams -The Best Decision Requires the Best Information AvailableInformation is data that is put in a form that allows goals and objectives to be pursued.Providing correct project data is the responsibility of project team members and no one e

8、lse.These individuals represent expert knowledge which is the best information available to decision makers.Without corporate buy-in,Portfolio Management does not exist.As an alternative,one may ask oneself,“Do I feel lucky?!”Dirty HarryThe need to manage risk appears obvious,but(1)it is not always

9、done and(2)when it is done,it is not always done correctly.We will consider:1.What happens when risk is not assessed or used.2.Why some do not want to assess or use risk.3.What are right and wrong ways in which to use it.1.What happens when risk is not assessed or used.ValueBlockbusterPotentialProba

10、bility of SuccessValueWorthNothingThe typical explanation as to why risk is not assessed is,“Its too inaccurate to be of any use.”2.Why some do not want to assess or use risk.DEADLYCLEANDEADLYCLEANRisk is actually uncertainty and uncertainty is actually confidence.The word inaccurate is not even rel

11、evant as it is actually a distribution of outcomes for which an expert has some,a lot,or no confidence.WRONGTwo important factors for determining the worth of a drug are the quality of the science and the commercial value.Both are of equal weight as both are critical for success.AR Pharma(a very lar

12、ge pharmaceutical)has decided to use a 0-10 rating for each factor then add the scores.Projects will be prioritized based on their index out of a possible 20.3.What are right and wrong ways in which to use risk?Project A -Science is avg.Score is 5.Comm is avg.Score is 5.Index 10Project B -Science is

13、 bad.Score is 0.Comm is good.Score is 10.Index 10What are right and wrong ways in which to use risk?SAFETYEFFICACY50%50%50%50%$1b$250mProject ASAFETYEFFICACY1%99%1%9%$10b$1mProject BRIGHT Blockbusters are nice,but they are far and in between.Operating capital is required to sustain any business into

14、 the future.Small projects are the bread&butter of a pharmaceutical.If strict adherence is paid to selecting the highest valued opportunity,then a pharmaceutical has to ask itself if it will still be around to reap those benefits in the future.Efficiency is simply a rate of return.That is,its an ind

15、ex.If you have one dollar to invest and you are trying to maximize your return,then put it in the project with the greatest ROI.If you dont do it,your stockholders will and youll soon find yourself out of business.But ROI is NOT value.What does it mean to the manager of an R&D Portfolio?An efficienc

16、y index such as ROI or PRODUCTIVITY,can used to pack as much value into a limited space as is possible.When selecting projects to pursue from a large number,order them by an efficiency measure,then stop when you run out of money.Youll create your highest valued portfolio.(One caveat is that you can

17、improve total value a bit by using a special mathematical method called integer programming.)Other scarce resources such as chemists,drug substance,manufacturing capacity,and time are subject to the same principles of distribution.Put them into the greatest efficiency projects first!(If the problem

18、is too complex,remember that integer programming was developed for just such problems.)Any business in any universe must make a profit,other-wise value is destroyed.Value destruction falls into the same class as A vacuum(which nature abhors),Black holes(from which nothing escapes)and The second law

19、of thermodynamics(a one-way street from which one does not return).Conclusion:Portfolio management must clearly create value.All else is nice,but not necessary.Corporate Buy-inRisk ManagementProductivityProject CProject IProject BProject FProject HProject GProject EProject DProject JProject ALikelih

20、ood of R&D SuccessNet Present ValueYearsRisk Adjusted Net SalesProject IProject BProject FProject GProject EProject JProject ARisk Adjusted CostsRisk Adjusted NPVValue OptimisationBest Use of Resources?Optimal Growth?Optimal Project Plan?Optimal Regional Portfolio?Optimal Therapeutic portfolio?Proba

21、bility(%)Gold StdValue()Project CProject IProject BProject FProject HProject GProject EProject DProject JProject ALikelihood of R&D SuccessNet Present ValueRisk DistributionRisk ManagementYearsRisk Adjusted Net SalesControl Cash FlowRevenue Stream and EfficiencyProj IProj BProj FProj GProj EProj JPr

22、oj ARisk Adjusted CostsRisk Adjusted NPVUse Efficiency MeasuresProject CProject IProject BProject FProject HProject GProject EProject DProject JProject ALikelihood of R&D SuccessNet Present ValueRisk-Adjusted NPVProfitSAFETYEFFICACYPRESENTATIONValue in s%of OccurrenceCommercial EnvironmentIn Summary

23、o The Portfolio represents the future of a company.o Success is determined by value creation today and in the future.o In the face of uncertainty,the use of expected(risk-adjusted)values tips the odds of winning in favor of decision makers.o The best portfolio is that which efficiently distributes resources and maximizes productivity.