Bloomberg technology increasingly catering for multi-asset buy-side

Global head of buy-side solutions at Bloomberg tells The TRADE that unified technology across the order management process and asset classes is increasingly in demand.

Bloomberg’s global head of buy-side solutions, Ian Peckett, said the company was focused on unifying functions along the order management process to help the buy-side achieve greater efficiency when trading their whole portfolio.

Peckett highlighted that consolidation across institutions had led to a much wider range of assets being accounted for in portfolios, while ongoing demand for workflow optimisation in the last year had led to firms increased appetite for multi-asset aggregated solutions to improve efficiency.

Bloomberg is increasingly looking to maximise the research capabilities and ESG data on its Terminal to transition that information through the order management process and offer solutions across into portfolio management, construction and implementation, as well as risk management and post-trade capabilities across asset classes, said Peckett.

“The organisation is looking much more across the entire investment lifecycle. We’re increasingly recognising that the goal of efficiency requires us to breakdown many of the traditional silos. You can be efficient in each of those individual functions but in aggregate you’re missing an opportunity,” Peckett told The TRADE.

“We are building tools to allow you to optimise your portfolio, we’re bringing into play things like inventory so that not only can you say this would be the ideal bonds to buy but they’re ideal and they’re available. We’re also looking at how we bring post-trade data, e.g. fail likelihood, upstream into the investment process. These functions have traditionally been quite siloed and I think technology has a massive opportunity to unify those with the expectation of a better outcome and better returns.”

Globalisation and consolidation have meant buy-side firms are increasingly including multiple asset classes in their portfolios as opposed to one. Buy-side heavyweight BlackRock announced plans in May to bring more multi-asset trading capabilities to its flagship Aladdin platform through a partnership with trading systems provider FlexTrade.

According to Peckett, this expansion has meant that institutions have required multiple systems and this has brought operational challenges that firms are keen to remove using technology.

“The buy-side is going through a phase where it is very focused on operational efficiency and working out how to remove constraints from the operating model,” he said.

“Some of those limitations have been having different systems talk to each other or having systems that only support a subset of the asset classes. Many firms probably started with a separate fixed income derivatives capability and a separate equity derivatives capability, possibly on different systems, which creates operational complexity. What we’re seeing is that people are trying to remove those constraints. In an ideal world, you’d be able to trade every asset class in every region.”

Among the multi-asset solutions to be developed by Bloomberg in light of this operational efficiency trend on the buy-side is its freshly launched next-generation risk and attribution model, MAC3, that builds on its acquisition of the Barclays Risk Analytics and Index Solutions (BRAIS) business in 2016.

“This [the MAC3 Risk models] is a truly compelling multi-asset class offering. We’ve done some really differentiating and sophisticated things in terms of how we have allowed people to use those risk models for both a review and a construction basis, and recognise that they use them in different ways. They’re much more responsive but also you have capabilities to tune to different horizons, so whether you want short-dated because you’re high frequency or whether you’re an asset owner and you take a very long term view, we can tune our risk models now to give you that expectation,” he concluded.