An Interview with Koen van Ederen | Probability & Partners

Yu-Pei Sung

07 december 2022

On 24 November, I had a chance to meet Koen van Ederen, a quantitative financial risk management consultant at Probability & Partners, and also a UvA alumnus. In this interview, Koen talks about his experience at work and how he is learning and developing constantly.

Nice to meet you Koen! Could you tell us a bit about yourself?

Hi, my name is Koen van Ederen and I am an alumnus of the VSAE. I started my bachelor’s degree in Econometrics at the UvA in 2016. After graduating from the bachelor’s program, I did two master’s programs in Financial Econometrics and in Actuarial Science and Financial Mathematics. Since January 2022, I started working at Probability as a quantitative financial risk management consultant. My hobbies include playing football, going to the gym, and listening to music. At the moment, I am considering doing the Postmaster Actuarial Practice Cycle at the UvA, and possibly later on do the FRM program.

Could you tell us how you chose to do both master’s degree in Econometrics and Actuarial science and mathematical finance?

I started university at 17 and graduated from Master’s Financial Econometrics at 21, therefore I found myself a bit too young to start working full-time. Moreover, since I very much enjoyed studying, I decided to extend my studies for one more year with a master’s in actuarial science. There was a lot of overlap between the two programs, so I ended up taking a lot of electives and completed (almost) every track in Econometrics.

Could you tell us a bit about what kinds of services Probability & Partners provides, as well as which sector you are currently working in?

We provide a wide range of financial risk management services to different kinds of financial institutions. The main sectors we work in are banking, asset management, insurance, and pensions. Naturally, each of these sectors work with their own problem and goals while being constrained by regulations regarding financial risks. However, the quantitative approach and way of thinking is rather similar across sectors and services. Expertise of modelling in each domain (e.g., credit risk) can be applied in all the sectors. Likewise, within a single sector, we are able to implement the knowledge we gained from working of different domains.

I currently work in the asset management sector, where the project I am working on takes about 1.5 year. This is rather long; some projects can also take (only) 2-3 months. Within this project, I am working on the performance measurement. This means I keep track of the performance of the financial instruments, which is important for the strategic decision making.

What tasks do you mainly do as a quantitative financial risk management consultant?

When I first started my job, I mainly assisted the senior consultants with their projects; therefore, I gained a lot of knowledge in a short time. In February 2022, I started working on my first client project, with a large team from Probability.

During the week, we work for our clients for four days (external) and one day for Probability itself (internal). The internal day is meant for doing research, internal projects, personal development, and education. We also have a lot of master students writing a thesis with us. For all these different projects, we have bi-weekly meetings to keep everyone up to date on the progress of all projects. This keeps everyone involved in all what is happening within our company. Besides this, we have weekly sales meetings to keep everyone involved in our potential future clients.

We post our research on our website and write columns for the financial investigator, I have also written one in the beginning of this year. By doing this we show our clients what we specialize in and how we possibly can help them. In special cases the research results are shared with the client in a one-on-one. We try to help them implementing new promising methods, for example about AI, ESG portfolio construction or risk estimation techniques.

I read that Probability & Partners believes in an “integrated approach” to risk management. Could you explain more about that?

The main idea is that, besides focusing on all individual risk components, we also focus on the interaction between different kinds of risk. If you were to focus on each kind of risk individually and not the interaction between different risk, the other types of risk can become more enhanced. That means there is a trade-off between dealing with each risk. If we compare modelling risk to operating a machine, focusing on certain types of risk is like tuning some of the buttons on the machine, but then the other buttons are affected too. We need to take into consideration the entire functioning of the machine instead.

What makes working at Probability unique?

The reason I chose to work at Probability was that the company is expanding, and there are relatively more seniors than juniors. We get a lot of attention from the senior consultants, which means as a junior you can learn a lot in a short amount of time.

We are a consultancy company which consist of three different types of people: People who are life-time consultant for the financial sector, people who worked in the sectors we currently give advice to; Practitioners, and academic who are linked to the university and stimulate research. Each of us has different roles and we learn a lot from each other in this way. This blend of academics, practitioners and consultants is good for clients and makes us pretty unique.

What kinds of challenges do you face at work?

The most direct challenge would be that whatever a client asks for, we need to provide them with a solution. Furthermore, every time when we start a new project with a new company, we begin another ‘learning from scratch’ process. It is also challenging to keep up with all the development in the different sectors, which means we are constantly aware of what is happening and keeping each other updated on developments.

What are the things you only learned at work after graduation?

At university they teach the mathematical approaches and problem-solving skills. At work, models are applied to real world situations, so a macroeconomic, or a more high-level view of the world is required. Also, no one is ever done with learning. Either you learn just by experience or by taking courses next to work.

Could you give some advice to students that are interested in risk advisory?

We have open positions for master’s thesis interns all year around. We also participated in the Master Speeddate Event organized by the VSAE. Probability has been expanding and hiring more junior professionals. Therefore, if you are interested in risk advisory, feel free to give us a call or send us an email.