A
Alpha Generation
Alpha refers to the return of a particular investment strategy compared to a relevant market index or benchmark, or the portfolio’s value in excess of expected market returns. Alpha generation refers to all of the ways portfolio managers try to maximize alpha, usually by diversifying portfolios to reduce unsystematic risk.
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Asset Lifecycle Management
Asset lifecycle management involves all of the practices asset managers employ to deal with a financial asset (whether a specific investment or an entire portfolio) throughout its lifecycle. This lifecycle typically starts with acquisition and ends with a sale. These practices may include risk management, performance optimization, and regulatory compliance, among others.
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Asset Manager
Asset managers work for financial service providers, overseeing and optimizing their clients’ investment portfolios. They provide expert guidance tailored to each client’s investment objectives and risk tolerance. By carefully selecting and managing assets across various classes—such as equities, bonds, cash, real estate, and commodities—they aim to balance risk and return. A well-diversified portfolio often includes a mix of these asset classes to enhance stability and long-term growth.
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B
Back Office Alignment
Back office alignment refers to asset managers ensuring that essential back office functions like accounting, IT, settlement, and compliance are performed in a way that supports the asset manager’s broader strategic goals.
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Booking
Trade booking is the process of capturing, recording, and managing the details of a financial transaction (i.e. the trade) within a firm’s internal systems from execution to settlement.
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C
Cash Flow Projection
A cash flow projection is a forward-looking estimate of cash coming in and out of a fund over a month, quarter, or year, in order to predict future cash balances and manage liquidity.
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Corporate Actions
Corporate actions are significant events a public company performs that have a significant effect on shareholders or characterize the company’s health and strategic direction.
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Credit Facilities
A credit facility is a loan made in corporate finance that allows the company to take out an umbrella loan to raise capital over an extended period of time, as opposed to reapplying for a new loan every time the company needs capital.
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D
Data Management
Data management includes all of the processes buy-side firms use to acquire, store, validate, govern, and distribute financial data throughout the enterprise and across the industry.
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E
EOD P&L Calculation
EOD (end-of-day) P&L (profit and loss) calculation refers to the process of computing the total profit or loss of a portfolio, position, or fund after the market closes. Traders, risk managers, accountants and other teams depend on this metric to understand and analyze performance.
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F
Front Office Alignment
Front office alignment refers to asset managers equipping sales and trading teams with the strategies, technologies, and processes required to work efficiently and drive growth.
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FX Hedging
FX (foreign exchange) hedging helps protect current or future positions against the risks of currency exchange rate fluctuations.
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M
Middle Office Operations
The middle office manages risk and IT resources, ensuring the accurate processing of complex financial transactions and providing a critical bridge between the front and back office.
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O
OTC Confirmation and Settlement
Over-the-counter (OTC) confirmation and settlement refers to the post-trade process by which counterparties verify the details of a bespoke OTC financial contract (like a derivative) and then exchange assets and payments to complete the transaction.
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Options Exercises and Assignments
In options trading, exercise refers to when the option buyer uses their right to buy (call) or sell (put) the underlying stock at the strike price. Assignment refers to the corresponding obligation of the option seller (writer) to fulfill that transaction, forcing them to buy or sell the shares.
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P
Position Transfers
Position transfer is the process of moving assets (stocks, funds, futures, etc.) from one account to another between different brokers, within the same broker to a different account, or between an account and the fund itself.
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Price Master Management
Price master management refers to all the work teams perform to ensure the price master tool, application, or platform is an accurate record of pricing data that applies firm-specific pricing and valuation rules consistently and correctly.
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R
Reference Data
Reference data describes the counterparty and security identifiers needed to make a trade and settle the transaction.
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Regulatory Workflows
Regulatory workflows refer to the processes asset managers must follow in order to ensure compliance with various regulatory frameworks that govern their firm, investments, regions of operation, and other factors.
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S
Security Master
A security master is a centralized database for reference data about all of the financial instruments (stocks, bonds, derivatives, etc.) in a fund or portfolio. It serves as a “single source of truth” for various teams and workflows across the enterprise, including trading, compliance, operations, risk management, and many others.
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Security and Reference Data Management
Security and reference data management refers to all of the practices asset managers must employ in order to maintain a complete and accurate record of security and reference data, also known as the golden copy.
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Swaps Resets
Swaps resets are scheduled dates when the floating-rate leg of an interest rate swap is recalculated to reflect current market rates (SOFR or LIBOR), which determines the next payment amount.
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T
Trade Capture
Trade capture refers to the process of immediately recording (or capturing) all the details of an executed trade (price, quantity, asset, time, counterparty, etc.) into the official front office trading system. Trade capture creates the book of record that feeds risk management, settlement, and accounting systems.
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Trade Management
Trade management refers to oversight practices for the process of a financial transaction from execution (placing the order) through post-trade activities (settlement, compliance, risk management).
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Trade Processing
Trade processing includes the automated and manual workflows that happen after a trade is executed in order to ensure accurate confirmation, clearing, settlement, and record-keeping. Trade processing is critical for operational efficiency and risk management.
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