Challenge

A large, complex fund allocator was experiencing problems managing their fund investments, particularly their private equity fund investments. The firm was using several older systems that did not handle the complexities of their investments well. Also, these systems were supplemented with a collection of Microsoft© Excel© spreadsheets that were difficult to track and increased the risk of error and stale data.

Approach

Portfolio BI was engaged by the firm to implement the PBI Portfolio Management System (PBI) and PBI Order Management System (OMS) functionality for allocators, with a focus on transaction management and reporting. The PBI PMS and OMS, which includes the Order Management, Transaction Management, Portfolio Management, and Security Master modules, provides the client with order and portfolio management functionality for fund investment transactions as well as direct trading and integrates with their upstream and downstream systems.
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PBI focused the first phase of the PBI PMS and PBI OMS implementation on fund investments, co-mingled hedge fund-style investments, separately managed accounts (SMAs), and commitment-based, private equity-style investments. The second phase has involved the onboarding of the firm’s other investments, such as direct equity investments, FX instruments, and derivatives.
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The PBI Security Master maintains a hierarchical entity structure that allows the client to track managers, funds, and individual holdings across their portfolios, as well as track both share-based and non-unitized vehicles. Using PBI’s optimized functionality, the client’s operations team can now book transactions — including sub-transaction breakouts — against these entities to make transaction entry as seamless as possible while supporting more complex concepts such as AIVs and in-kind distributions. Also, the PBI OMS supports loading valuations for unitized and non-unitized investments, and updates positions and market values based on those valuations.
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Finally, the PBI PMS flexible allocation engine functionality was leveraged to enable the client to track partnership breakouts of their investments.

Solution

Implementing PBI PMS and PBI EDM has dramatically enhanced the client’s transaction tracking capabilities, making transaction entry more smooth and efficient. The client can now book investments in a way that is more aligned with how they are viewed from a business perspective while also minimizing redundant data entry.