The credit crisis has created a much greater demand for external portfolio systems. The question is, have the vendors been able to keep up? In a recent NeuGroup Treasury Investment Managers’ Peer Group discussion, members explored ways to get their arms around portfolio data and whether external system measure up.
And measure was an operative word as “measuring risk” was agreed upon as the most important feature of any analytic system. A close second was the ability to calculate performance. Beyond these functions, scenario and allocation modeling would be great, members determined, but first and foremost, the risk metrics need to be correct. Most members still struggle with the accuracy of their systems.
One member presented the Bloomberg analytics system to the group last spring and was able to update the group with the current status: “All the models are working well, but we still have more to learn to fully optimize the system,” the member said. The system is still an excellent choice for his company, which receives a daily data upload from its custodian. Another company does the same and it also reports that data is also updated daily by the custodian.
As one would expect, members use a variety of systems, i.e., Bloomberg, POINT, Clearwater, and BlackRock. In general these systems plus Excel (the most widely used system) give them what they need. Most would argue, however, for a system that did just a little more than provide the basic risk-management tools.