"One system I looked at stored everything in your portfolio relative to the benchmark you choose," says Riddles. "So if you're reporting your portfolio relative to the EAFA Index, it makes it very easy to report. But if you want to look at that portfolio compared to some other index, you have to go back and get all the transactions again and recalculate everything. Base-Two stores each index basically as a separate portfolio," yet PAS still manages to compress the data so that it doesn't swamp the system.
Riddles also just installed Base-Two's Composite Performance System (Comps) product for calculating composites, which was previously done on spreadsheets. Among Riddles' praise for Base-Two is Wong's ability to run an obviously lean organization, while still managing to respond to requests within hours.
Satisfying the needs of an institutional client in performance measurement as well as mainstream portfolio accounting, can lead to one-stop-shopping with the same vendor.
Intech, an investment division of Prudential that uses proprietary intelligence software to execute trades in the client arena, uses IMS 2000 and QReturns, from Marlton, N.J.-based QED Information Systems. "They allow us to build daily performance on separate accounts and links over time to report to not only prospective, but current clients as well," says Joe Runnels, director of trading and operations. The division, which manages in excess of $5 billion in assets, produces composite performance as well as individual client performance reports with the software.
Size was an overwhelming factor for Jim Cheadle, an investment consultant in the private wealth management area of Copper Mountain Trust, in choosing Thomson's PERAscope system to analyze returns on some 1,200 accounts. "We wanted it to do general asset segment breakdowns - small capital growth, small cap value, large cap value, international. And, I just knew coming from the previous shop that we would need a pretty extensive system."
PERAscope's interface, called The Integrator, impressed Cheadle. Moving from the legacy, Excel-based system to PERAscope took about six months, says Cheadle, mainly due to a lack of staffing .
Vendors are working on new products and alliances, such as CheckFree's deal with Vestek to link its portfolio holdings data with Vestek's performance attribution and analytic software. First Rate Performance will introduce 4.0 this summer, which will open the SQL data warehousing environment to performance users. And GreenHill plans to introduce after-tax return calculations this year as a module in its GHperf product line.
Wilshire Associates will introduce Wilshire Spectrum at the end of this quarter, to integrate its risk management technology with its global performance measurement and attribution capabilities for a total fund management tool. The combination, says Wilshire, will allow fund sponsors to analyze their total capital market risk in a global covariance framework and attribute performance at the total fund level to asset allocation, risk factor, selection, currency and trading decisions.
As products mature into better solutions, the industry may find that the next issue is trained staff. Sabina Hastings, a senior consultant with The Spaulding Group and training coordinator for TSG's Institute of Performance Measurement says, "the times that I have had to research someone's having performance outages, it has usually been a result of little or no comprehension of the process and the impact of that."