During the pricing cycle, asset managers face the task of gathering prices from multiple vendors and brokers, as well as quotes from their internal desk. These quotes are used to price securities based on the waterfall hierarchy and as a reference to compare with other broker-dealer quotes. While vendors and brokers provide quotes, it is the responsibility of the fund manager to ensure accuracy in the pricing process and report the valuation of securities to the valuation committee and investors.
Fund managers, especially credit fund managers, conduct due diligence during the pricing cycle by comparing quotes received from various sources with their internal desk and primary/secondary sources. If the deviation between the quotes exceeds a predetermined threshold, managers consolidate these outlier quotes and initiate the “challenge” process. However, performing price comparisons, identifying outliers, and finalizing candidates for the challenge is a labor-intensive activity that usually requires manual effort unless a pricing solution is available for intelligent automation.
Once the quotes to be challenged are determined, fund managers send out challenge emails to the respective sources, or they may use dedicated portals to load the challenged prices. Upon receiving the revised quotes from the pricing source, the pricing spreadsheets are updated manually, and the security prices are refreshed to reflect the latest marks.
Overall, the challenge and mark revision process is time-consuming due to the extensive manual effort involved. To streamline this process and eliminate inefficiencies, a pricing automation solution comes into play.
IVP Pricing and Valuation Automation Solution: Enhancing Efficiency
IVP Pricing and Valuation Automation Solution offer a comprehensive solution to simplify the pricing and valuation process for funds. By leveraging end-to-end automation, this solution effectively retrieves data from vendors and brokers and applies waterfall pricing rules, ensuring that prices meet the respective threshold checks. It seamlessly connects with leading pricing data vendors and brokers, providing a flexible and configurable pricing engine suitable for various pricing processes.
With IVP Pricing and Valuation Automation Solution, the laborious manual effort involved in price comparisons and identifying outliers is minimized. The solution utilizes intelligent logic to automatically identify outlier quotes, significantly reducing the time and resources required for the challenge process. By automating these tasks, fund managers can focus on more strategic activities, enhancing productivity and efficiency within their pricing cycle.
In addition to streamlining the challenge process, this pricing solution incorporates a well-designed, built-in module for tracking price challenges along with their revised marks. This feature allows fund managers to maintain a transparent and organized record of all challenges and their outcomes. By centralizing this information within the solution, the entire pricing and valuation process becomes more streamlined, reducing the risk of errors and improving overall data integrity.
Efficient pricing and valuation are vital for asset managers, and the process can be challenging, particularly when dealing with multiple quotes from different sources. However, with IVP Pricing and Valuation Automation Solution, funds can simplify and streamline this complex process. By automating tasks such as price comparisons, outlier identification, challenge initiation, and mark revision, the solution enables fund managers to save time, reduce manual errors, and enhance overall efficiency.