As risk and compliance continue to dominate regulators’ agenda, Thomson Reuters and BlackRock have teamed up to create and distribute fixed income derived analytics from BlackRock Solutions.
Building and managing an analytics process in-house typically requires a substantial investment.
“Obviously if you’re a fund manager right now, you’re caught between the need to seek returns and your compliance officer, who is all over you about understanding risk. To meet the return mandate, until now your only option was to employ a large number of people to scrub your data. You may have hundreds of people doing it,” Neil Masterson, managing director and head of Investors at Thomson Reuters, said in an interview.
Rob Goldstein, senior managing director, head of BlackRock’s Institutional business and BlackRock Solutions, added: “Typically people buy [an analytics solution]. They do only one segment of the market place, such as corporate bonds, but not non-dollar instruments. But given the low yield and return environment, investors must expand.”
The new offering, Thomson Reuters Fixed Income Derived Analytics powered by BlackRock Solutions, is a turnkey solution based on Thomson Reuters security indicative data and prices, and leverages BlackRock Solutions’ proprietary fixed income models.
Created via BlackRock’s analytics infrastructure Aladdin, the new solution provides detailed analytics in over 1.2 million securities covered in six asset classes initially, and aims to turn performing valuation and risk analysis on complex fixed income instruments into a more efficient and less costly process, Masterson and Goldstein noted. The two companies have also created a virtual feed-back loop that helps to continuously refine and validate the data, they said.
While Thomson Reuters and BlackRock have been working together for over 20 years, this is the first time they have brought a joint product to market.
“If you think about BlackRock, we buy market data from many market participants. One of our oldest partners is Thomson Reuters. We leverage them on the fixed income side,” Goldstein explains.
"Through the years, BlackRock has been leveraging Thomson Reuters’ data, analyzing it and providing risk data, which it then distributed through its Aladdin platform. “We had been limiting it to the Aladdin community. Expanding to Thomson Reuters and its community was the next step in our relationship,” Goldstein added.