Bloomberg closed the acquisition of the Barclays Risk Analytics and Index Solutions Ltd. (BRAIS) on 24 August 2016. The transaction includes the intellectual property of the Barclays POINT portfolio analytics product, as well as their fixed income benchmark indices and the BRAIS strategy indices. Within 18 months, Barclays will retire POINT. POINT users must now transition to a new system, either transitioning to Bloomberg PORT or identifying and implementing one or more third party systems for its portfolio analytics and benchmark data management capabilities.
In July 2016 RIMES conducted a survey of buy-side professionals, representing a variety of business and technology functions from firms across EMEA, North America and Asia Pacific. The purpose of the survey was to understand the data management impacts of the transition – whether to Bloomberg PORT or to a third party system – as other surveys and commentary we have seen have focused on the analytics.
RIMES focused on the 101 respondents who indicated they used Barclays POINT.
These are a few key findings:
1. Transition plans. Twenty percent were planning to switch to Bloomberg PORT, 44% were looking for alternatives and 36% were considering a “hybrid” solution (i.e. implementing more than one solution, which might include PORT).
2. Transition Timescales. Twenty-five percent were starting a search and selection process immediately (i.e. as of the survey date). Twenty percent intended to start their search and selection in the next 3-6 months, 35% in the next 6-12 months, and 20% after the deal closed. Now that the deal has closed, it is likely that around 45% have started, or are engaged in, the search and selection process.
3. Use of Barclays Benchmarks. Almost 85% said they used Barclays benchmarks outside of POINT. In other words, they consumed Barclays benchmark data in their other, non-POINT, systems. This is evidence that POINT is used as a data management system in addition to its analytics capabilities.
4. Complexity of Benchmark Needs. A majority (59%) indicated they have complex, highly customized benchmark data requirements. If some of that customization extends to the Barclays benchmarks, and if POINT is used for this purpose, those respondents will be seeking services, systems or data vendors that can provide benchmark customization.
5. Sourcing of Barclays Benchmarks. Thirty-six percent indicated they source Barclays benchmark data directly from Barclays (i.e. via POINT). An equal number sourced these benchmarks from RIMES – further evidence that POINT is used as a data management tool in those organizations, as well as a tool for portfolio-related analytics. Those respondents will likely be seeking solutions that can provide the data management service provided by POINT. Even if a POINT replacement is selected that can also provide Barclays benchmark data, there might still be a requirement for a more robust managed data service. The 36% of respondents who sourced Barclays benchmarks from RIMES were also POINT users, suggesting they understood the unique value provided by a managed data service.
Our survey clearly shows that POINT is used for a number of purposes and its retirement poses a challenge to find and implement satisfactory alternatives. This challenge certainly translates into business opportunities for the systems under consideration.
There are also data management impacts arising from the BRAIS sale, in addition to the portfolio analytics impacts. The survey shows that POINT is used both as a source of Barclays and non-Barclays data, and as a data management tool to customize benchmarks for use both within, and outside of, POINT. A number of firms that used POINT also understood the value of engaging a managed data service to source the same benchmarks they could already source via POINT.
Finally, the implementation of a new portfolio analytics system must naturally include benchmark data. If the chosen system does not include all of the required data, there is the real risk of the implementation being delayed. Provision of data should be a critical component of any system selection. Firms looking to replace POINT, therefore, need to look at the requirements for a data management solution in addition to a portfolio management solution.
RIMES has spent 2 decades building our expertise in managed data services to its current level of efficiency and effectiveness. We have established relationships with hundreds of data providers, and over 40 end-systems providers, to source market data and create and deliver fit-for-purpose feeds that are system-ready. We have extensive experience de-risking system implementations.
Whether you are amongst those firms seeking a replacement for POINT, you are considering a system change for other reasons, or you are investigating how a managed data service can benefit your organization, contact RIMES today.