Customized benchmarks and blended indices are becoming ever more commonplace. Their growing prevalence reflects both the trend among investors to develop more complex investment objectives and constraints, and increasing use by investment managers with specialist strategies.
Calculating and managing these custom benchmarks and indices is no easy task. It requires particular expertise – expertise that many investment management organizations lack. Which is one of the reasons the investment managers Forrester Consulting interviewed for its recent Total Economic Impact (TEI) study have turned to the RIMES Managed Data Service (MDS).
As a VP at one firm put it: “We chose RIMES because of their focus and what they were able to demonstrate for us — cost, delivery of quality, timeliness, and their ability to customize and construct what we need them to. They turned out to really be the best value on the market.”
Efficiency, scalability and headcount savings
With its tried and tested know-how, RIMES MDS can help manage the process of implementing customs and blends, resulting in project management time savings. By working with RIMES, the study participants save significant IT resources too, which would have had to be allocated to these customization projects in their previous environments.
In addition, firms saw data operations savings. For example, one organization’s Global Business Solutions Group (BSG) uses RIMES to provide complex custom-blended benchmarks for its clients.
In the fixed-income markets, clients are getting more and more sophisticated, so there is a lot of customization that is going on to create these benchmarks at the constituent level,” said an investment analyst in the group.
A BSG project manager added: “From an expertise perspective, working with RIMES on some of these customized benchmark requests or for the blends or the hedging, it’s helpful to have their methodology to leverage. If we had to do that ourselves, it would be more trial and error.”
Indeed, were it not for working with RIMES, the company estimated it would have to backfill approximately 1.5 BSG resources for every four custom-blended benchmarks it produces.
According to Forrester, the interviewees were also confident in RIMES’ ability to partner with them on future product offerings and additional services, and expect to see further productivity gains, resource savings and faster time-to-market benefits as the firms implement new custom benchmarks and indices.
As one VP noted: “Clients are coming up with more sophisticated requests, and as we roll out new segments of products, we need the underlying data necessary to support those. RIMES helps us meet the demand for our clients to provide new approaches and win new business.”