BISAM was pleased to support and participate in the FTF Performance Measurement conference, held March 10 – 11 in New York City. As you may recall from our pre-conference blog post, BISAM’s Sean Murray participated as a moderator during both the Fixed Income Attribution and Multi-Asset Class Attribution models – and the BISAM team was in attendance to join the day’s discussions.
Following is a summary of the BISAM team’s key takeaways “as heard” at the conference. We will expand upon several of these points in the coming quarter. Take a look and let us know what you think via the “comments” box below.
- The industry is “held hostage” by benchmark costs, but can’t alleviate those costs with “low cost options” due to their customers’ driving the decision
- If an asset management firm says “no” to a customer’s benchmark choice, they lose that customer to a firm that will say yes
- Beware potential cost overruns - a function of poor management of the data (i.e., multiple receipts of the same index)
- Data In/Data Out remains the biggest challenge in the Fixed Income world
- “Check your data, check your data, check your data.” But, make sure those checks align with your operating model – otherwise, the downside of managing the checks outweigh the newfound quality. The struggle is real.
- Quality attribution must be proven to portfolio managers. Performance managers must be able to demonstrate that impacts on performance are consistent with front-office decision-making, if they are to get the PMs to buy into the results.
- Maturation in the market has led to more informed customers/investors who better understand fixed income and multi-asset strategies Many more internal and external customers now understand what performance results are trying to tell them, so there is a “panacea” of interest in viewing returns, and pressure on performance managers to ensure delivery of the same, consistent set of results across all stakeholders – colleagues and customers alike.
- Heard on the attribution panels:
- “Attribution needs to help me explain official performance returns.”
- “Transaction-based analysis is more accurate than holdings-based analysis and more efficient when it comes to data management.”
- “Active business must prove worth and alpha over passive business. Peer group attribution is key to this.”
- There is a battle of opinions over Secure private Clouds vs. SaaS.
- Consider a cloud library that firms can “call” as a function.