Ardevora outlines plans for new TCA system

Ardevora Asset Management is to overhaul its Transaction Cost Analysis (TCA) system shortlisting ITG, Liquidmetrix and Markit as its likely new providers.

Ardevora Asset Management is to overhaul its Transaction Cost Analysis (TCA) system shortlisting ITG, Liquidmetrix and Markit as its likely new providers.

The asset manager, originally founded by former Liontrust partners William Pattison and Jeremy Lang, said it was responding to changes in regulatory and client requests for more detail on transaction costs.

TCA systems allow asset managers to evaluate broker performance, report execution performance to clients, assess trader performance against peers and help fund managers comply with their ‘best execution’ obligations.

Speaking to The TRADE, Neil Bond, partner at Ardevora, said a decision would be made by the end of the month.

He explained: “It is important so we can see where we are doing a good and bad job. We are looking at Liquidmetrix, ITG and Markit, which are all very good in Europe.

“Regulators want us to be able to demonstrate we are doing the right thing and not just say we are doing the right thing. They want a decent TCA system in place to show we are keeping an eye on the brokers.”

The move comes as the Investment Association launched its discussion paper on costs best practice and ahead of a April 2015 deadline requiring workplace pension trustees to adhere to new governance standards on costs.

Bond said clients were noticeably becoming a lot more demanding and that TCA was of vital importance to the company as it seeks to grow to £2 billion in Assets Under Management by the end of the year.

Ardevora is the latest in a series of asset managers who are no longer relying solely on the sell-side to provide TCA analytics, by investing in their own third-party tools. 

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