IBOR Enters the Spotlight

Anthony Malakian, US Editor, WatersTechnology

As asset managers look to gain a better understanding of their portfolio positions, they are figuring out how best to employ an investment book of record (IBOR) strategy.

On Thursday, October 10, at the New York Marriot Marquees in midtown, we will be hosting our annual Buy-Side Technology North America conference. We have an excellent list of C-level participants, which will be highlighted by the 9:30 CTO Roundtable with Mihir Shah (Fidelity Investments), Adam Stauffer (HBK Capital), Bill Murphy (Blackstone Group), Jeff Hurley (Canada Pension Plan Investment Board), and Hylton Socher (Fortress Investment Group), who will also deliver the morning keynote address.

After the event, over the course of the following days and weeks, a good deal of content will come out of the panels and presentations. For today, though, I wanted to highlight one main area of focus: Investment Book of Record, or IBOR.

At 2:20, Andrew Meisel of Meisel Consulting will deliver a 15 minute introduction on IBOR and that will be immediately followed by a full panel discussion with representatives from Calpers, ING Investment Management, Multifonds, SimCorp and Eagle Investments, and will be moderated by consultant Barry Chester.

The idea of an IBOR has taken on greater importance among buy-side firms due to the increased complexity of trading strategies, globalization and regulatory challenges, notes my colleague Nicholas Hamilton, who wrote about IBOR's uptake on the buy side recently for Waters' sibling publication Inside Reference Data.

Hamilton writes that as firms look to gain a more accurate view of their portfolio positions at the start of the trading day, they are turning toward systems that provide real-time access to their current positions with all market events applied to it, including orders implied, orders executed and trades confirmed.

Hamilton quotes Igor Lobanov, enterprise architect at London-based Legal & General Investment Management, who says that asset managers need to find the right balance between an aggregated data solution and a shadow accounting system:

"At one end of the spectrum, there is the possibility of keeping all of your order management, middle office and back office systems as you currently have them and putting a layer on top that aggregates position data and figures out what the enterprise-wide view of the positions is," Lobanov says. "This looks like an IBOR, it functions like an IBOR, but it is not something you would call a business system-it is an operational data store. At the other end of the spectrum, you could have a separate system which consumes low-level transactional data and computes, independently of other systems, what the current position is."

IBOR has been well-discussed in Europe. My colleague James Rundle wrote an in-depth feature on the topic for the April issue of Waters, and there's no doubt that more will come on the subject on these shores, especially with BST North America next week, and a special report planned for November.

In the meantime, I'd be interested to hear from my readers on what they're seeing and working on. Shoot me an email to [email protected] Being that I will be out of the office from Oct. 8 through Oct. 15, I may not be responsive as I'll be in the windy hills of Galway, but I'll be sure to get back to you upon my return.

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