Bloomberg may have been quick to attempt to dampen fears over its acquisition of Barclays’ Point portfolio analytics solution, but John thinks industry concerns over the solution’s impending retirement simply aren’t going away anytime soon.
At the end of August, Bloomberg announced that it had completed the acquisition of Barclays' fixed-income benchmark indices, Brais strategy indices, and the intellectual property of Point portfolio analytics.
It was a move designed to bolster the data giant's analytics and indices capabilities, but following the completion of the deal, Bloomberg found itself having to fend off concerns from fixed-income market participants over both the future of the Point solution and the possibility of hikes in data prices.
The key element here is that Bloomberg did not acquire the Point solution wholesale, just the intellectual property rights, which in turn means Barclays cannot be entirely at fault for only supporting the platform for another 18 months (from the completion of the acquisition).
Point's models and analytics ─ including Brais' Global Risk Model and its Hybrid Performance Attribution analysis ─ will be integrated into Bloomberg's Port offering, but it seems that the industry isn't convinced that it's going to be of any benefit, or even fit for purpose.
A number of surveys conducted on the subject show that fixed-income traders are instead pointing the finger squarely at Bloomberg for undermining a system that is widely used for risk analytics and performance attribution.
London-based consultancy Citisoft's survey, conducted earlier this year, found that 50 percent of its respondents didn't believe the Port solution was capable of supporting its risk analytics operations, and none believed that "Port fully supports portfolio management, risk analytics, performance attribution, asset allocation, optimization, or scenario analysis in its current state."
Meanwhile, a survey conducted by investment and portfolio management vendor SimCorp during a recent webcast polling 114 individuals from 60 firms across North America found that:
• Nearly 90 percent of respondents do not believe or are unsure that Bloomberg Port, the proposed alternative to Point, will fulfill their fixed-income requirements.
• 75 percent are planning to initiate a search or have an initiative underway to replace Barclays Point.
• More than 50 percent see the acquisition of Barclay's Point as an opportunity to re-assess front-office fixed-income support.
Clearly then there is a significant amount of doubt within the fixed-income community that Port is going to be up to scratch and many are looking at the other options available to them; BISAM, Axioma and StatPro have all invested in risk analytics acquisitions this year and will know that some of Bloomberg's clients will be looking to defect.
While Bloomberg has sought to makes assurances over the future of Port, as well as fending off fears over data fees, one cannot help but feel that the firm may just be at a tipping point: Without significant investment in Port's functionary and continuous communication with those in the fixed-income space, Bloomberg might find it has just acquired an ageing, legacy solution.
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