U.S. Bancorp Asset Management is switching to the Charles River Investment Management System (IMS) as part of a migration from multiple systems to a single-platform solution.
"Primarily we were looking for a solid single-platform solution with a real proven compliance engine. Those were the key drivers," says Nancy Wiser, senior managing director, operations and technology at USBAM, headquartered in Minneapolis. The national investment-firm - which manages $127 billion in assets (including the First American Funds) - plans to implement the complete IMS software suite consisting of Charles River Manager for portfolio management, Charles River Trader for order-management and trading, and Charles River Compliance for real-time and portfolio-level compliance monitoring. It expects to roll out the system to about 70 users, including portfolio managers, fund managers, traders and compliance experts, by June 2004.
In addition, USBAM is going to be "plugging in" Plexus Trade Measurement to measure its trading effectiveness, says Wiser, adding that it "helps to ensure best-execution."
As part of the investment-systems overhaul, USBAM is replacing two systems: Linedata's order-management system and Thomson Financial's Oneva EQ, an equity-order-management engine, (formerly known as Open Trader). It's also eliminating a proprietary fixed-income application.
Though it will continue to use Thomson's Portia for portfolio management to house its assets, the Charles River system will be able to access the data to conduct analysis and for compliance, says Wiser. The firm will also continue to route trades through Thomson's Trade Route (now ATR) for order routing via the Financial Information Exchange (FIX) protocol.
The firm chose Charles River Development after conducting an extensive request-for-information process from February through April of 2003 that included 13 best-of-breed firms. After winnowing the list to a smaller group of names, USBAM began a request-for-proposal (RFP) process that concluded in July of 2003.
"And Charles River just really shined through the (RFP) process," says Wiser. In addition to its compliance engine, another distinguishing factor for Charles River was that it's trading platform originated as a fixed-income platform that later migrated towards equities. "That was an important factor for us," says Wiser, noting fixed-income tends to be more complicated. "When you begin with equities and migrate toward fixed-income, it's potentially more difficult for them to be successful. Going the other route is a bit easier and we felt more comfortable," she explains.
The decision also reflects USBAM's move toward a best-of-breed technology infrastructure, instead of building home grown applications, which has been its approach historically, Wiser says. "Charles River fits perfectly into that. That was a relevant factor in our decision, she says, adding, "We did feel that Charles River did demonstrate superior technology platforms and flexibility."
Wiser says the firm's implementation will occur in stages, anticipating the second quarter for equities, potentially the third quarter for fixed-income and the end of third-quarter or beginning of fourth-quarter for private asset-management.
Initially, USBAM will implement version 7.22 of IMS, with plans to migrate to version 8.0 in November. With version 7.22, Charles River upgraded its compliance engine to Java, which is three to six times faster in internal testing of processing times, notes a spokesman.
Adding pre-trade compliance was a critical factor, according to Wiser. "We really believe to successfully compete in the institutional marketplace that you must have automated pre-trade compliance," says Wiser. "We are participants in the institutional marketplace and we expect to significantly grow that business," she says. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio