Codefarm has applied this novel concept to the structuring and management of the complex portfolios for the Credit Derivatives market.

Optimization tools using evolutionary computing techniques generate candidate portfolios and subjects them to continuous testing, iteratively evolving them in the search to find the portfolio of names that provides the best 'fit'. The best (or 'fittest') solutions are then selected and recombined (mated) or mutated with other potential solutions to see if a better solution or fit can be produced.

This way, the entire spectrum of names is used to develop or evolve an optimized portfolio that is generally far superior to portfolios reached by traditional methods.

Codefarm is believed to be the first and largest UK company dedicated to providing evolutionary computing solutions for enterprise, and in particular, for portfolio-based financial products.

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