AFTAs 2023: Best IT team (buy side)—TCW Group

Team name: Architecture and Engineering Team (AET)

About the team

The remit of TCW Group’s Architecture and Engineering Team (AET) is to:

  • Deliver the firm’s architectural roadmap
  • Set standards for development/runtime tools
  • Establish end-to-end architecture and design patterns
  • Run the firm’s architecture review board and mature software development processes
  • Engineer innovative solutions and drive TCW Group’s cloud journey
  • Develop shareable components and frameworks

TCW Group’s AET is responsible for delivering the foundational components of the firm’s proprietary platform, TCW Platform for Investments Insights (TPII).

Key project   

AET enabled the business to realize TCW’s international growth strategy by helping to establish a major fixed-income trading venue in London. This was only possible because AET provided scale to the structured products desk, a challenging exercise because of the security’s bespoke nature, and built various capabilities needed to comply with Mifid II regulations. Five percent of total revenue was generated by the London trading desk in the first year, a full 12 months earlier than projected.

Rising interest rates over the last two years resulted in a very challenging environment for the financial industry, especially asset managers like TCW, which have a large fixed-income asset base. Even though an environment like this offers unique investment opportunities, these need to be self-funded since accompanying liquidity constraints make raising capital challenging. AET delivered TPII by getting no-cost leverage from Microsoft by winning the pilot partnership, thereby accelerating the establishment of the London Trading Center.”

Problems solved

Structured product deals required multiple teams to manually navigate through 200 to 300 pages of unstructured documentation to determine consistency with a portfolio’s investment strategy and compliance’s ability to monitor the product’s mandate. AET won a pilot Microsoft offered its partners that provided access to Microsoft’s AI engineers to help drive its Azure OpenAI service, which was still in its infancy at the time. Generative AI enabled delivery of automated deal evaluation and compliance rule extraction.

Technology

TPII is deployed on Microsoft Azure and has three primary modules:

  • TCW Intelligent Module (TIM): Utilizes Azure OpenAI service through a large language model (LLM) abstraction interface, LangChain
  • Mifid Module: Responsible for regulatory reporting
  • Portfolio Construction Module (PortConstruct): Invokes TIM during security selection and the Mifid module to establish Mifid reporting

All modules on TPII have a react micro front-end, Python microservices, and either a Snowflake or AzureSQL back-end. TPII uses Azure services extensively for rapid development.

Why they won

TCW Group’s first ever win in the American Financial Technology Awards is in one of the most sought-after of all 30 categories on offer: best IT team (buy side). The Los Angeles–based fixed-income specialist’s Architecture and Engineering Team was responsible for delivering the win for the firm, thanks to its support in creating a fixed-income trading desk in London, in partnership with Microsoft. The alliance allowed TCW to use generative AI to automate the deal evaluation and compliance rule extraction functions as part of the overall project. The result: 5% of the firm’s total revenue was generated by the London operation a year earlier than anticipated. Outstanding.  

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