PERFORMANCE BENCHMARKING: Valuations in European Buy-Side Institutions
London - 29 October 2010
An inside look at how 67 European financial institutions manage their valuations data challenges
A-Team Group, specialists in news, research and events for financial IT executives, is pleased to announce the publication of the first in a series of vendor benchmarking studies - Performance Benchmarking: Valuations in European Buy-Side Institutions.
A-Team Group conducted a comprehensive survey with 67 European institutions--a mix of asset managers and the securities services firms that support them--to understand what they are doing to "get it right" when it comes to the critical function of accurate valuations.
This first release is a 34-page report, sponsored by Interactive Data and Markit, and is available for free download at A-Team's website. It offers an inside look at how European financial institutions manage their valuations data challenges and looks at where valuations are being used and what approach firms take to data sourcing right down to the asset class they cover. It also looks at the frequency of pricing by asset class, the volume of instruments priced and how these valuations are managed internally. Respondents revealed budget ranges for their valuations data, indicating what proportion of the overall market data spend valuations data represents, and shared their predictions for how they expect budgets for valuations data to change in the next several years. The report also looks at what financial institutions consider to be the most important requirements when sourcing data.
The second part of the Valuations in European Buy-Side Institutions report is being made available to survey participants and sponsors and reviews benchmarking scores for vendor performance according to several criteria including overall satisfaction, coverage, accuracy, transparency, value for money and service quality and reliability. The ratings are also broken down by asset type, including government bonds, high yield & emerging markets, investment grade corporate bonds, mortgage- and asset-backed securities, vanilla OTC derivatives, complex OTC derivatives and structured products and loans.
Angela Wilbraham, Chief Executive Officer of A-Team Group, says, "Transparency is a very important issue when dealing with valuations data. We believe that delivering transparency into the quality of external valuations data providers is an essential requirement for buy-side institutions and securities services firms. We're very pleased with the level of participation across financial institutions in this important industry study and believe the results provide a level of detail never before seen in this space."
"The report from A-Team underscores how European asset managers have embraced best practices in valuations," said Charles Longden, managing director at Markit Evaluated Bonds. "Ultimately, investors benefit when independence, quality of data, and transparency are priorities for the buy side's approach to valuing OTC assets."
Anthony Belcher, Director, European Fixed Income at Interactive Data, added, "Auditors, regulators, risk managers and investors are all trying to understand the risk inherent in OTC instruments. They are therefore looking for more information on the assumptions and the inputs made in the evaluation process in order to help improve their understanding of their risk exposure."