Apr 20, 2021

Overview

The firm, a state-owned corporation, manages the assets of a state fund and other investment trusts. With over USD 62 billion in AUM, the firm uses internal staff and external firms to manage multiple asset classes: stocks, private equities, bonds, real estate, infrastructure, and absolute return strategies.

The client engaged Cutter to review its overall operational environment. We determined as a high priority a search for portfolio management systems for internally managed fixed income portfolios. After leading the search and evaluation of vendors, the client engaged Cutter to manage the implementation of BlackRock’s Aladdin platform.

Our client sought a relatively quick implementation to alleviate the need to renew a contract and upgrade the current OMS platform, and address uncertainties about the migration of Barclay’s POINT to the Bloomberg product suite.

Cutter Solution

The Cutter team leveraged expertise gained on previous Aladdin implementations and our knowledge about investment strategies required by institutional managers, pension plans, and public (sovereign wealth) funds.

During the six-month implementation effort, Cutter managed the project, business process changes, and implementation of technology interfaces. This work included collaborating with BlackRock’s implementation team, Bloomberg, Tradeweb, and multiple divisions of BNY Mellon that provide custody, fund administration, and currency management services to the firm.

Cutter ensured that BlackRock’s standard implementation methodology addressed unique requirements expected by the client.

Cutter’s role included the following:

  • Defining requirements and use cases for critical front office, compliance, and operational processes and interfaces.
  • Challenging and validating BlackRock’s implementation preferences.
  • Writing user acceptance scripts.
  • Facilitating user acceptance testing and training.

The client legacy OMS system was retired on schedule and functionality provided by POINT transitioned to Aladdin. This new platform allows the firm to analyze fund-level performance and risks across all asset classes. Fixed income managers are managing their portfolios on a platform with a higher level of functionality and operational support than with the previous OMS.

To assist our client in achieving its goals, additional highlights about Cutter’s contributions include the following:

  • Validated that Aladdin was a viable replacement for POINT functionality.
  • Led the selection of an FX trading platform needed to start a transition from the outsourced provider of FX settlement and hedging services.
  • Defined use cases for automating fund-level cash movements and liquidity management (forecasts, equitization, etc.).
  • Established optimal interfaces with services providers and new processes for post-trade processing (e.g., trade clearing, corporate action elections, TBA allocations, and reconciliation).
  • Established a compliance role aligned with standards adopted by asset managers and institutional investors (asset owners).
  • Co-designed a solution for the internally managed completion/overlay strategies used in public equities.
  • Developed a solution for providing look-through functionality for ETFs outside BlackRock’s wheelhouse.

Want to speak with a Cutter consultant to learn more about this topic or how we can help you? Contact us at connect@cutterassociates.com.