Investment management firm BlackRock and data vendor Thomson Reuters will partner to create a distributed fixed-income derived analytics set through BlackRock Solutions (BRS), the firm's solutions provision arm.
BlackRock and Thomson Reuters say the new service will save clients, including hedge funds, asset managers, and sovereign wealth funds, among others, the work of creating an analytics process internally. The service will be provided to institutional clients via Thomson Reuters’ DataScope portals and built with BlackRock's Aladdin infrastructure.
According to BST's sibling publication Inside Market Data, distribution via Thomson Reuters will be updated daily, and comprise key security-level market risk parameters including nominal yield, nominal spread, option-adjusted spread and modified duration for a variety of mortgage and mortgage-backed securities (MBSs), convertible debt and bonds.
“We recognize that there’s a whole segment in the marketplace that doesn’t want an entire platform and the whole suite of analytics we provide, but still need certain basic analytics metrics and risk metrics,” Robert Goldstein, senior managing director and head of BlackRock’s institutional business and BlackRock Solutions, tells Inside Market Data.
The companies say BlackRock's reputation in the fixed-income space, combined with growing requirements around scenario analysis and Monte Carlo simulations for risk management and regulatory compliance, will bolster demand for the service among smaller buy-side firms that can't put together the information for those models internally, or at cost.
"Using these analytics to manage portfolios, customers should feel confident that they have the most accurate view of the securities and instruments they hold as these are the same derived analytics that BlackRock and our clients use to manage their portfolios," says Goldstein.
The solution comes as BlackRock continues a push to leverage its expertise, and burgeoning liquidity, in debt instruments whose secondary markets are closely influenced by derivatives. A flurry of publicity surrounded the announcement of a matching engine for corporate bonds built into BlackRock’s Aladdin earlier this summer.
BST analysis predicts BlackRock will seek to monetize further internal platforms in the near term as ascendant buy-side institutions continue to employ technology to take advantage of uncertainty surrounding the large sell-side institutions' business models. Whether BlackRock does so independently, or as in this case through a tie-up with an established provider like Thomson Reuters, will be something to closely watch going forward.
Anthony and James look at developments pertaining to the Consolidated Audit Trail and wonder if big-tech companies could challenge traditional asset managers.Subscribe to Weekly Wrap emails
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