Waters Rankings 2016: Best Performance Measurement and Attribution System Provider — BISAM

bisam-performance-watersrankings2016
Bénédicte Godet, Tim Kurkjian, and John Ferrara

If order management systems constitute the heart of a buy-side firm, then performance measurement and attribution platforms are their brains, responsible for providing reliable information and transparency into how exactly they are performing and whether changes to the structure of their portfolios need to be effected or not. This is now the third year that this category has been on offer in the Waters Rankings, and for the third consecutive year we have a different winner—Convergex Group won the inaugural award back in 2014, while S&P Capital IQ was last year’s recipient.

This year, BISAM steps into the winners’ circle and by so doing adds yet another title to its impressive string of Buy-Side Technology Awards wins, having dominated the corresponding category in those awards for eight straight years. BISAM’s B-One performance, attribution and Global Investment Performance Standards (GIPS) reporting platform is responsible for landing all of BISAM’s silverware over the years, although now its strategy entails so much more than just performance.

The name of the game for the New York-based vendor is integration—specifically with risk—a rainbow it has been chasing for the best part of a decade, proposing that pure performance numbers viewed in isolation are meaningless. In this regard, BISAM has been toying with the idea of adding support for risk consumption data to better articulate to portfolio managers not only where and how performance emanated from, but also the levels of risk courted and “consumed” in order to achieve that performance.

In March this year, BISAM’s integration dream took a significant step forward when it announced that it had acquired New York-based market risk specialist FinAnalytica and its Cognity offering, a multi-asset class risk management, portfolio construction, and decision analytics platform, developed specifically for the buy side. According to a press release, the acquisition “responds to a growing demand for unified performance and risk,” a clear nod to the firm’s integration drive. “This market requirement is driven by several key industry trends, including a shift toward risk factor-based allocation approaches, pressure from asset owners for a deeper understanding of both risk and performance profiles, and the race for higher performing investment strategies.” 

Clearly FinAnalytica, awarded six US patents for its risk analysis—including methodologies for risk budgeting, a new approach for valuing derivatives, a portfolio construction technique using fat-tailed models, and a strategy for determining which risk characteristics explain the behavior of risk factors—is set to play a pivotal role in BISAM’s buy-side strategy going forward, a strategy that according to Waters’ readers is already paying dividends.  

 

This year, BISAM steps into the winners’ circle and by so doing adds yet another title to its impressive string of Buy-Side Technology Awards wins, having dominated the corresponding category in those awards for eight straight years.

 

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