By Terry Flanagan

Buy Side Pushes for IBOR

Asset managers need to have data updated intraday in order for front offices to have accurate information across regions and asset classes, fueling an increased market appetite for Investment Book of Record (IBOR) systems that can function independently of both front and back office solutions.

“The ability to visualize positions across asset classes and regions intraday is essential for firms looking to have better information on which to base their investment decisions,” Bob Leaper, head of business development for North America at DST Global Solutions, an investment data management provider, told Markets Media.

Line of business heads want to get access to their portfolios, what they own, what’s their cash balance, or are there any corporate actions they need to know about that might affect their portfolios, but haven’t gone through the full accounting cycle yet. “That’s kind of that demand pull coming in for IBOR,” Leaper said.

“The chief investment officer is concerned about the total exposure to a counterparty, the total exposure is to say, General Motors, whereas the equity portfolio manager just cares about their position and the fixed income manager just cares about their position,” he added.

The IBOR Standards Working Group, under the auspices of a group of large UK-based asset managers, issued an IBOR requirements document in May of this year, which is intended to provide a consensus on IBOR.

The document describes the key function of an IBOR platforms, which are categorized as “core” and “frontier” capabilities.

Core capabilities refer to IBOR;s rile as a central position manager, including extraction of potions, data, capturing events which impact positions, and managing the quality of event and position data.

Frontier capabilities refer to the enrichment of core position data, to make it more usable or more valuable to the users and consuming applications, including aggregation and grouping for positons, pricing/valuation for asset positions, and analytics, especially for fixed income and derivative positions.

DST’s latest version of its Anova platform includes a number of enhancements in the performance space, particularly around fixed income attribution.

“We support five different models, so a firm can use a Campisi model or a Tim Lord model or another type of model to understand exactly where the returns were coming from,” said Leaper. “How much of my return was due to the carry of the portfolio, how much of it was just rolling down the yield curve? It can be difficult to do that because of data demands. Our approach disaggregates your attribution based on those characteristics.”

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