Any investment manager who has worked with external service providers knows the value of experience and expertise as it relates to their trading strategy. A lack of familiarity or comfort with a given investment approach can quickly spiral out of control, leading to delays in reporting or, even worse, material errors in the outputs. In a competitive external environment where raising and retaining capital can be a challenge, such problems are unacceptable.
In this particular case, the client was executing nearly 125,000 trades per month in various asset classes such as equities, futures, warrants, and swaps. In order to meet the needs of the investment manager, MUFG had to ensure that a scalable, customized workflow was in place to handle the trade volume but still ensure that quality reporting could be delivered in a timely fashion. In addition, the client had concerns surrounding security of the data, understandable given the proprietary nature of many high-frequency trading strategies.
In order to guarantee protection of the data, the client would drop an encrypted trade file into a secure FTP site which is then retrieved and decrypted within MUFG. No information was passed back and forth without encryption or password protection, ensuring data integrity. Using automation tools, the entire process of reviewing the trade file, security setup, loading trades into MUFG’s general ledger system, and portfolio reconciliation takes less than an hour.
Leveraging best-in-class technology, which has been seamlessly integrated through the front, middle, and back office, MUFG was able to meet the unique requirements of the investment manager. By operating in a daily environment through a custom workflow with their fund administrator, the client was able to ensure a consistent, replicable process in order to deliver a substantial amount of data quickly and securely. These efficiencies create stability and predictability, both for the investment manager and the investors that they serve.