AFTAs 2016: Best Data Management Initiative: Buy Side—Rotation Capital Management

Whether you're managing $100 million or $100 billion, the process of managing data is becoming exponentially trickier due to new sources of information, new abilities to store that information, new methods of interrogating it, and new regulatory requirements.

The winner, Rotation Capital Management, is one of those small, emerging managers with a handful of employees. Founded in 2014 with a focus on distressed debt opportunities, capital structure arbitrage and special situations, the firm knew that in order to be competitive it would have to partner with third parties for certain technology support, according to Marshall Terry, COO and chief compliance officer at the firm. However, Rotation doesn’t believe in outsourcing everything; the decision-making regarding the platform’s use in the firm has to remain in-house.

That led Rotation to Financial Fabric, which provides its DataHub platform using a subscription, software-as-a-service (SaaS) model, hosted in Microsoft’s Azure cloud. The Rotation DataHub manages all of Rotation’s trades, positions, cash, margin and risk data—historical, current and ongoing—on a daily basis. It uses that information to derive analytics for portfolio management, trade reconciliation, risk analysis, investor reporting, and regulatory compliance, all from one platform with a single source of the truth.

What makes Financial Fabric unique is its use of machine learning as part of its “smart data loader,” allowing for new data feeds to be added without new software development. This means that the onboarding process is rapid and Rotation doesn’t have to add staff. Rather, as the company grows, Terry says, it simply scales up access to the platform, as Financial Fabric charges on a per-user basis model determined according to clients’ needs. On a daily basis, the Rotation DataHub receives over 100 data files from Rotation’s OMS provider, fund administrator, and multiple prime brokers. From there, Terry and his colleagues can access all of that information on a single dashboard to view the normalized data, including trades, positions, cash, and margins. “I don’t have the internal funds to go and build that, nor do I have the core expertise and knowledge to do that,” he says. “But at the same time, we needed to figure out a way to manage our data efficiently and effectively.”

The last three winners of this category were JPMorgan (2015), MSD Capital (2014) and Citi (2013).

The Rotation DataHub manages all of Rotation’s trades, positions, cash, margin and risk data—historical, current and ongoing—on a daily basis. It uses that information to derive analytics for portfolio management, trade reconciliation, risk analysis, investor reporting, and regulatory compliance, all from one platform with a single source of the truth.

[For more on Rotation Capital's implementation of Financial Fabric's DataHub, click here.]