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How technology simplifies investment book of record maintenance

January 2, 2024
clock 4 MIN READ

Data transparency is a double-edged sword. 


The increase in data transparency unlocks incredible insight for investors, but it also makes data management and portfolio analytics far more complicated. Investment teams are now looking to answer questions once thought impossible to address. Luckily, technology is simplifying the process. 

Answering complex questions

Suppose that, based on a recent current event, you need to determine your exposure to Taiwan. Does your team have an action plan for this question? Your steps might include reaching out individually to managers, consulting multiple technology platforms, building a model in Excel, or all of the above.

Sophisticated investors are now using multi-asset class portfolio management systems to quickly answer these questions. The process requires comprehensive tagging of the portfolio—typically with a combination of standardized categories and research-based assumptions. Once this is accomplished, fund-level and position-level geographic tags can be rolled up at the portfolio level. When investors link their portfolio analytics to their investment book of record, they can also receive real-time updates on the underlying data for their portfolio. 

This graph depicts the total gross exposure of a demonstration portfolio based on countries. Data shown in the above charts is from a paper portfolio created by the Novus Platform for demonstration purposes only. Past Performance is not a reliable indicator of future results.


This graph depicts the gross exposure of a demonstration portfolio to Taiwan. Data shown in the above charts is from a paper portfolio created by the Novus Platform for demonstration purposes only. Past Performance is not a reliable indicator of future results.

With regard to the Taiwan exposure example, suppose your team recently completely redeemed from an account. With an up-to-date IBOR, the impact of this redemption will immediately show through in your portfolio analytics.

Maintaining a clean investment book of record

After catching a few errors in custodian data, many investors wish to reconcile more than one source of truth to ensure an accurate IBOR. In the past, monitoring two parallel record sets would require substantial manual work. However, direct integrations with custodians and optical character recognition (OCR) technology substantially automate this process. 

If you want to learn more about the document management piece of this equation, check out our article on Intelligent document processing

Maintaining a clean IBOR translates directly into a multitude of benefits for investment management and financial institutions:

  1. Improved data accuracy and consistency, reducing the risk of making decisions based on outdated or erroneous information.
  2. Enhanced decision-making capabilities, as portfolio managers can rely on real-time insights to make informed choices in a rapidly changing market.
  3. Support adherence to reporting requirements and a clear audit trail. This is becoming essential as the importance of regulatory compliance and proper risk management increases.

Once more, let’s explore this Taiwan scenario. After determining your exposure to the country, your investment team wants to know the liquidity of the fund investments made by the managers in Taiwan.

Historically, this required a dynamic Excel model to stay on top of different liquidity terms. The impact of allocation adjustments on the entire portfolio previously needed to be evaluated through a custom-built Excel model with multiple different potential cases. Investors today access this information with a few clicks, using a platform that allows users to: 

  • Model lockups
  • Automatically calculate redemption schedules
  • Determine available redemption amount based on the investment type
  • Use built-in models to test hypothetical scenarios
This chart illustrates the classification of a demonstration portfolio based on how many days to liquidate. Data shown in the above charts is from a paper portfolio created by the Novus Platform for demonstration purposes only. Past Performance is not a reliable indicator of future results.

In the dynamic landscape of data management and technology, platforms like Novus have emerged as catalysts in facilitating a clean IBOR through cutting-edge shadow accounting technology. The Novus Platform offers a suite of products that seamlessly integrate data management with investment analysis while allowing users ownership over the type of information they want to consume.

Using Ledger, our data operations tool

As part of the Novus Platform, Ledger acts as the core repository of investment data. Data is integrated through direct connections with custodian providers, document extraction via OCR technology, or manual uploads. By enriching custodian data with manager provided data, investors can have greater confidence in data accuracy. Ledger users can: 

  1. Create, store, and edit valuations, returns, and transactions
  2. Access market data, such as security and benchmark returns 
  3. Approve or reject any transaction added to the platform, streamlining workflows by allowing tiered transaction approvals 
  4. Assign approval responsibilities based on transaction value 
  5. Immediately update associated portfolio analytics with the latest IBOR data

Technology services provided by SEI through its affiliates and subsidiaries. Charts included herein are for illustrative purpose only. Information provided by SEI through its affiliates and subsidiaries. This information is for educational purposes only and should not be considered investment advice. The strategies discussed herein are complex and are not suitable for all investors.

The Novus Platform is not an investment advisor, broker dealer, or financial institution and does not offer or provide advice regarding analysis of securities or effecting transactions in securities. The Novus Platform does not endorse or promote any mentioned investment management firm or any fund managed by any such firm.  The purpose of the information herein is to demonstrate the capabilities of the Novus Platform.