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Pricing automation Archives - Indus Valley Partners

Automating challenge in the pricing process

Understanding the “challenge” involved in the pricing process

By | Blog, Price Master | No Comments

During the pricing cycle, asset managers receive prices from multiple vendors and brokers as well as quotes from their internal desk, especially for hard-to-value securities. These quotes are used to price securities based on waterfall hierarchy and also as a reference to compare with other broker-dealer quotes. While quotes are sent by vendors and broker-dealers, the responsibility is on the fund manager to ensure accuracy in the pricing process and to report the valuation of the securities to their valuation committee and investors. Read More

Understanding the Risks Involved in the Pricing and Valuation Process

Understanding the Risks Involved in the Pricing and Valuation Process

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Pricing and valuation is an inherently complex process. Funds are pricing hundreds, sometimes thousands, of instruments in dozens of portfolios, using inputs from multiple market data vendors and broker quotes. These are typically categorized as listed, over-the-counter (OTC) and private securities. Since most funds have a relatively small team devoted to the task of calculating both daily and monthly prices, they have developed over time highly customized spreadsheets for each category of securities to make the process easier.
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COVID-19 challenges need automation to improve controls in month-end pricing and valuation

Create Long-Term Success with Pricing Automation

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Given its complex nature, the pricing of portfolio positions often involves a great deal of time-consuming work, beginning with data collection to rules application and pricing tests. Even in normal market environments, this process is no easy task. As we have now entered an entirely new dynamic, pricing teams are under an immense amount of pressure to accurately value their securities. Many of the funds have seen significant increase in trading volume and this coupled with underlying volatility in the market have created never-seen pricing issues for the valuation teams.

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