Pier 88 Taps LiquidityBook for POEMS
Selecting the proper portfolio and order/execution management system is a right of passage for newly launched hedge funds, and it was no different for San Francisco-based Pier 88 Investment Partners.
The three-year-old alternative asset manager, which invests in public equities and convertible bonds, managed its initial fund using a combination of Bloomberg EMSX, a prime broker’s P&L monitoring platform, and a series of internal spreadsheets to monitor risk limits and reconcile performance, Jackie Fertitta, COO and CCO of Pier 88 told Markets Media.
After registering with the U.S. Securities and Exchange Commission and launching its second of its four current funds, the asset manager decided that it was time to invest in a dedicated POEM platform.
“As a small fund we are very conscious about our expenses,” she said. “However, it is a high priority for our firm to establish institutional quality processes for our investors.”
After investigating its options, Pier 88 selected LiquidityBook’s Web-based LBX Buy-Side offering.
It took the vendor approximately four weeks to build out the connectivity and reports for the firm’s fund administrator and custodians, according to Fertitta. “Coordinating testing and configuration requirements amongst the various technology departments can take some time to work through,” she said.
Once the firm had established its initial workflow, Fertitta estimated that Pier 88 could roll out additional funds in a matter of days as long as the new funds used the same service provider.
“The straight through processing of trades- from routing orders to execution, to settlement and record-keeping- with our brokers, fund administrator, and multiple custodians has been an incredibly valuable feature to our portfolio managers,” she said.
Although the firm’s return on investment from the new system is hard to quantify, the results are very noticeable regarding trading operations and visibility to monitor the various portfolios, Fertitta added.
Electronification of the municipal bond market also presents a large opportunity.
The success of Northbound trading showed electronic execution is way forward for the bond market.
Algorithms have become more prevalent in the spot FX market.
Increased electronification has created useable and accessible real-time and historic trade data.
Buy-side firms can discover liquidity more efficiently and execute on Turquoise.