Challenge

A hedge fund manager outgrew its ability to operate using only Microsoft® Excel® spreadsheets, necessitating an order and portfolio management system. The required system had to provide the ability to model structured products, CLO debt, and CLO equity, as well as credit instruments. Also, the system needed the ability to import a third-party source of structured product collateral information on both holdings and the firm’s “investable universe” that is incorporated into their investor and risk reporting process.

Approach

Portfolio BI implemented the Portfolio BI Portfolio Management System (PBI PMS) and Portfolio BI Enterprise Data Management (PBI EDM) platforms to facilitate a robust front-to-back office workflow, consolidate the firm’s data sources, and enable flexible reporting.

The PBI PMS, powered by a robust Security Master, supports the ability to model the firm’s complex investments, and, more importantly, the ability to “look-through” their structured products assets at the underlying collateral debt instruments. The system also fully supports the firm’s credit and financing instruments.

Portfolio BI also enabled straight-through order management and trading process that allows the firm’s traders to quickly enter trading details and perform required data “enrichment” at the end of the trading day, instead of delaying the trade entry process. The allocation process is now coupled with Portfolio BI Trade Compliance, which provides immediate feedback if any investment guidelines are breached. Finally, the securities, trades, allocations, and cash entries automatically flow through to fund administrators and custodians, providing a straight-through process.

The PBI EDM and PBI Price Master modules consolidate the PBI Security Master and OMS data with market data that originates from Intex and other sources into an easy-to-use Data Warehouse that includes both “as-of” and “knowledge date” support.

Solution

Implementing Portfolio BI benefited the firm in many ways, including:
•Increased operational efficiencies
•Scalability as the fund grows, including the ability to add different asset types and trading strategies via the PBI OMS
•A more robust and easy to manage an operational workflow that does not rely on Excel for security and trading data
•A centralized Data Management platform and data governance model that matches their unique strategy and business workflows and aligns with current and future business needs
•A streamlined firm-wide reporting process due to the ability to access data from a single highly available sources.