The CIO’s Shortcut: Practical Uses of Fast Pro Forma Tools for Investment Committees

7 July 2025 | 
Dmitri Alexeev
Sample Portfolio Risk and Return Attribution. Source: AlphaBot

The Investment Committee Bottleneck

Investment Committee (IC) meetings are both an opportunity and a pain for Chief Investment Officers (CIOs). On one hand this is where important decisions are approved, such as capital commitments, and on the other this is where a brilliant idea may fall flat on its face due to insufficient clarity or visual perspective.

This is particularly true with alternative investments that are not “plug and play” allocations like mutual funds or ETFs. They raise questions regarding liquidity, portfolio level risk, risk-return trade-offs and strategy overlaps. And the number of possibilities can be large, making detailed analysis and comparisons difficult and time-consuming unless a fast and efficient proforma portfolio construction tool is used.

Instead of tedious and error-prone spreadsheets, memos, manager one-pagers and performance commentaries, the efficient proforma tool allows the CIO to walk into the room ready to provide a visual, quantitative answer the committee’s most critical question:

“What happens if we do this?”

Proforma Tool in Plain Terms

A proforma construction tool is a modeling application / platform that allows you to:

  • Add a potential investment to a portfolio and evaluate the impact in a few clicks
  • Adjust allocations dynamically, per periodic rebalancing schedule (such as quarterly) or even using some quantitative rules (allocations in inverse proportion to the risk/volatility, for example)
  • Instantly see the impact on risk, return, drawdown, relative benchmark performance etc
  • Review supporting documentation such as performance commentaries, market analysis, due diligence questionnaires etc.

The best tools, such as AlphaBot, for example, allow doing all of this “on the fly” – empowering the CIO to actually welcome the What-If questions from the Committee and building their confidence in a live, engaging discussion instead of a classically boring printout distribution meeting.

While such a tool is not an accounting or financial model and works using historical returns and approximations, the benefits of speed, visualization, and efficiency far outweigh these shortcomings. 

Sample Portfolio VAMI chart and Stats. Source: AlphaBot

Why It Matters for CIOs and ICs

An efficient pro-forma construction tool delivers value to the investment committee process in multiple ways.

  1. Makes an Abstract Idea Tangible

If your team, for example, recommends allocation to a hedge fund manager, a typical discussion would rotate around their returns (typically represented by a one pager with monthly performance and key stats), leaving the actual allocation impact in the realm of imagination.  Imagination can also magnify the potential risk related to such a decision out of proportion, triggering the committee to avoid making a decision. With a proforma tool the CIO can:

  • Drop the fund into the portfolio
  • Rebalance surrounding assets
  • Demonstrate the improvement of return vs risk
  • Compare drawdowns and recovery rates in known difficult market environments
  • Alleviate and address risk concerns from the IC members

All of a sudden, the CIO is no longer pitching a “cool” but abstract idea, but rather presenting a path to portfolio *evolution* with visuals and stats supporting it.

2. Streamline Decision-Making

There are lots of things an IC needs to consider, pushing them into a cognitive overload, especially when comparing multiple asset classes, managers or alternative investment vehicles. A quick model can answer questions like:

  • How does this manager stack up against our existing funds?
  • How does a particular allocation affect risk?
  • What happens in a known market crash environment such as a 2008-style drawdown?

Going back to the drawing board (more likely, a spreadsheet) will leave these questions hanging until the next follow up, delaying the actual decision, while a quick interactive model can answer them almost instantly and allow the discussion to move onto the next phase.

3. Facilitates Investment Choices Comparison

Choosing between two arbitrage or equity hedge managers? A pro forma tool will allow:

  • Plug in their historical returns
  • Estimate impact on Sharpe, Drawdown, and correlations
  • Compare side by side with your actual portfolio context

The charts and stats provided by the tool will be more clear, faster, and convincing than isolated manager presentations or “gut feeling”.

4. Supports Stakeholder Communication

To communicate IC decisions to a board or investment beneficiaries, clear communication and supporting materials are essential. A good proforma building tool allows quick production of:

  • Benchmark Comparison reports
  • Visuals and Statistics for Drawdown analysis
  • Portfolio Risk breakdown
  • Necessary data and statistics exports to be included in higher level (and more polished and customized) reports and marketing presentations

What to Look For in a Pro Forma Tool

FeatureWhy It Matters
Professional and fast interfaceSpeeds up modeling and mid-meeting what-if discussions
Custom asset inputsSupports alternatives with custom return streams
Scenario testingSee outcomes under historical stress events and compare multiple adjustments at once
Report generationEnables smooth IC documentation
Integration with existing portfoliosKeeps everything grounded in your actual exposure

A platform like AlphaBot, for example, provides these features and empowers the CIO with speed, flexibility, and relevance needed to focus the IC attention on important decisions.

Closing Remarks: Transition From Analyst to Allocator in a Click

For CIOs managing complex portfolios and diverse ICs, fast and efficient proforma building tools are not just nice to have, they are strategic accelerators. They allow:

  • Test more ideas without spending more time
  • Communicate with IC members and stakeholders more clearly
  • Get to the “Yes” (or “No”) point faster
  • Make better decisions under pressure

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