"As Heard" at the FTF Performance Measurement Americas Conference

Posted by Erika Alter, Global Head of Commercial Strategy, BISAM on Mar 22, 2016 5:57:34 PM
Find me on:

FTF_Performance_Measurement_Americas__A_Recap.png

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. 

Benchmarks:

  • 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 Quality:

  • 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.

Attribution:

  • 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.”

Cloud:

  • There is a battle of opinions over Secure private Clouds vs. SaaS.
  • Consider a cloud library that firms can “call” as a function.
Discuss! Did you attend the conference? What are your thoughts on the above points? Please share your comments and ideas below.

Leave a Comment

If you have any comments or have any questions about the subjects raised in this post, please fill in your details and message below. We'd like to hear from you.