Long Live the King

The long-ruling King of Spain, Juan Carlos I, this week announced he would abdicate the throne after almost 40 years, with his son Felipe set to soon take his place. Those who follow European royalty closely—which is an astounding number, actually—say the move is meant to improve the Spanish public's opinion of the monarchy, after a series of unpalatable revelations were reported about its inner affairs. It makes sense; after all, the future queen is a former journalist, herself.

How could this possibly relate to financial technology? Well, two ways.

Viva el Rey!
First, I'm happy to introduce myself as Buy-Side Technology's new caretaker, taking over for Anthony Malakian, who first began writing this column way back in November 2010.

Much like Felipe will surely be asking his old man for a little advice—Juan Carlos managed to gain General Franco's favor, before playing a pivotal role in reinstituting Spanish democracy, neither a small feat—there is a legacy to recognize here, too.

Upon joining Waters, I had zero journalism background. None. Not even high school newspaper. And much of what I've discovered about covering this space—and writing without footnotes—I owe to Anthony. Not that he's going anywhere; in fact, he's probably making a snarky comment about my fantasy baseball team as you read this. But I do hope to provide our readers the same kind of reporting and anecdotes he has over the years. I appreciate the opportunity, and this probably means I need to start learning how to play pool properly.

I've certainly sought to outline the unique challenges buy-side firms and organizations face, but have also sought to highlight their increasing ability to use technology to become more independent, more influential, and indeed, via commoditization of internal systems, more profitable.

Variety Matters
On reflection, it was initially a coincidence early on, but for most of the past two years, my editorial focus has leaned toward the buy side. Given my academic background, financial regulation was always going to be a large part of my coverage—and it remains so, from data management and new reporting requirements, to the knock-on effects of market structure change like newly-required collateral management tools and fixed income aggregation platforms now on offer.

However, the real thing that's kept me coming back to the buy side—and surely I'm not the first to say this—is its variety. From a prop trading specialist in Prague, to a Swiss private bank, an insurance giant in Allianz, several private equity mainstays, a university endowment, and a Brazilian asset manager forthcoming in September, I like to think we've brought in new types of shops, further afield and further up the investment chain, more frequently during my time here. (And those mentioned are just a selection of Waters cover profiles.)

I've sought to outline the unique challenges those firms and organizations face—which are sometimes underserved by the vendor community, and other times saturated with potential solutions—but I have also sought to highlight the buy side's native ability to use technology to become more independent, more influential, and indeed, via commoditization of internal systems, more profitable.

I expect to continue writing those stories. From what I can tell, given the tough market environment we're still in, it isn't a trend leaving us anytime soon.

Spanish Assets
Speaking of variety, the second reason I mention Spain is that a peculiar Spanish institution—Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria, or Sareb for short—is the focus of my next feature.

One of many European “bad banks,” Sareb was recently constructed to remove troubled real estate assets from Spanish markets, and unlike the Spanish monarchy—which has remained in place since the Visigoths in 649—it was meticulously designed, with buy-side input, to last only 15 years.

I'll be exploring how the building process has evolved from earlier bad bank models to Sareb, with technology naturally playing a greater role. If you’re an investor trading with Sareb, or a vendor that was involved in the project, I'd love to hear from you. Either give me a ring at +1 646.490.3968, or email me at timothy.murray@incisivemedia.com.