Asset managers are increasingly demanding a single, comprehensive, timely and accurate view of the firm’s positions to better support investment decisions and trading, risk monitoring, reconciliation and reporting.

The mechanism for this is an Investment Book of Record (IBOR), a set of investment data that is maintained with the primary purpose of supplying timely and accurate data to the front office of an investment manager to support the investment decision process.

Equally important to servicing front office needs, a well-constructed IBOR supports middle- office business functions such as calculation of daily security level performance measurement and portfolio attribution, oversight of the back office or custodian, management reporting, client billing, and client statements.

Industry drivers towards IBOR include a desire to unite the information of multiple back office systems in large institutions; to merge information from front and back, giving a more complete picture; and to maintain an independent view of positions when back office functions are outsourced.

“It sometimes seems that there are almost as many definitions of IBOR as there are asset managers. These often reflect the various uses of an IBOR but there are common key elements,” said Mike de Verteuil, international business development manager at Linedata. “Timely, accurate and comprehensive data is needed for any IBOR.

Linedata has launched an IBOR platform, Linedata I-BOR, that maintains and presents a complete and accurate start-of-day and intraday view of positions and cash, aggregating multiple data sources across an organization.

“Linedata I-BOR is able to pull together all the disparate information needed to build that view of a firm’s positions,” said de Verteuil. “This cannot be achieved with data from trading systems alone, which typically know only about trading events, or from accounting systems which work to end-of-day accounting timeframes.”

An IBOR is typically processed on a trade date basis, meaning any trades are recognized as part of the investment book on their market trade date.

The Accounting Book of Record (ABOR) is the investment book that supports the back-office operations. In most cases, the ABOR is maintained by an out-sourced provider and is typically the official book of record which will be the basis for financial statements and audited annually.

By providing a dynamic view of current positions, IBOR is a basis for reconciling ABOR. “An IBOR is not just an ABOR updated to start-of-day with corporate action adjustments, and it is not just another data repository/mart,” said Ronan Brennan, chief technology officer at MoneyMate, in a blog posting.

Fund companies and fund service providers have begun to implement investment accounting systems that support both the IBOR and ABOR on a single transaction set.

The objective, said Brennan, is to create “a single position keeping system that presents the different views of the world – back and front; satisfying the need for IBOR views, ABOR NAV/accounting views. GAAP/IFRS reporting, and out of the box ability to handle multiple custodians, trading venues, and investment cycles.”

“To succeed you need to be innovative, efficient, scaleable and happy to invest continuously in systems improvement,” said Brennan. “This is being driven by the need to be truly global. Investment managers know that to eke out performance they must minimize risk of bad investment decisions and optimize the use of available cash in the investment process.”