Bloomberg Takes Top Slot in A-Team Group’s North American Valuations Performance Benchmarking Survey

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Study of Buy-Side Managers Finds Overall Requirements Rising Budgets Seen Rising 25% in Short Term

Performance Benchmarking 2011: Valuations in North American Buy-Side Institutions

Performance Benchmarking 2011: Valuations in North American Buy-Side Institutions

Knowing where to source the most accurate and timely data from can be difficult. It’s something that we’ve examined in-depth in order to provide transparency into the quality of various data services through our benchmarking study.

Bloomberg swept the board in A-Team Group’s Performance Benchmarking survey of North American valuations services for the buy side. The report – sponsored by SIX Telekurs and Standard & Poor’s and available for free download from http://www.a-teamgroup.com – surveyed buy-side managers on key trends, budgets and experiences with vendor services.

Bloomberg’s valuations services were ranked No. 1 in the key Overall Satisfaction with Vendors category, and won six of the survey’s seven other top-level categories, including Coverage, Timeliness, Customer Service & Support, Innovation, Transparency and Value for Money. Markit took the No. 1 slot in the all-important Accuracy category.

The survey also ranked suppliers by asset class, with categories including Complex OTC Derivatives, Loans and other over-the-counter instruments. Co-sponsors SIX Telekurs took the top slot for the quality of its Investment Grade Corporate Bond coverage, while Standard & Poor’s won in the US Government Bonds and Municipal Bonds categories.

“The mis-pricing of assets is an area that regulators have been scrutinising increasingly since the credit crunch, and it’s something that financial institutions are working hard to get right. As a result, valuations data services have taken on a new importance, but knowing where to source the most accurate and timely data from can be difficult,” said Angela Wilbraham, CEO of A-Team Group and author of the report. “It’s something that we’ve examined in-depth in order to provide transparency into the quality of various data services through our benchmarking study.”

Bruno Burlon, Global Head Evaluated Pricing at SIX Telekurs, said, “This comprehensive report crystallizes the needs of valuations departments and forms the basis for open, enhanced dialog between suppliers and consumers – a process that can only benefit the industry as a whole. This fits very well with SIX Telekurs’ client-driven approach and our desire to work in partnership with our clients.”

Frank Dos Santos, Vice President of Global Evaluations at Standard and Poor's Securities Evaluations, said, “We think this process was a good one and appreciate the participation by the members. We are giving serious consideration to the results of this survey and look forward to participating again in the future”.

Survey publishers A-Team Group will be hosting a workshop to discuss the latest findings, as well as early conclusions from its European Valuations Benchmarking Survey, as part of the Valuations stream of A-Team’s Data Management for Risk, Analytics & Valuations conference in London on October 17. Registration is free at http://www.a-teamgroup.com/dmrav.

So just how are financial institutions and the managers of valuations data getting to grips with this challenging space and what are their goals for the year ahead? For the latest report, A-Team Group conducted an in-depth study across 50 North American institutions – a mix of asset managers and the securities services firms that support them – to understand what is driving the need for better valuations. The survey found that:

  • By far the biggest challenge people face in managing valuations is the lack of data, particularly in thinly traded securities. Finding the right models for valuing a security and dealing with the complexity of products followed.
  • Increasingly, financial institutions are turning to third-party valuations data, which was described as a very important or important source by 86% of respondents. It is also the method used to price the highest percentage of assets across firms with nearly a quarter of respondents pricing between 76% and 100% of their assets this way.
  • The top goal for valuations managers for the next 12 months is increasing their asset class coverage in certain areas (like private placements, alternative investments, emerging markets and derivatives). A further 16% mentioned a need for greater automation and STP of pricing process, suggesting an increased focus on systems and workflow processes. These were followed by expanding data sources at 12%.

Many more findings can be obtained through the full report, which is available for free download at http://www.a-teamgroup.com/valuations.

Vendor Performance Tables

For the Survey respondents ranked valuations suppliers across key performance factors. Their responses were used to generate a weighted score, and yielded these top-line results:

Overall Satisfaction with Vendors

Winner: Bloomberg - 79
Runner-Up: Thomson Reuters - 68

Accuracy

Winner: Markit - 77
Runner-Up: Bloomberg - 76

Coverage

Winner: Bloomberg - 76
Runner-Up: Interactive Data - 73

Customer Service and Support

Winner: Bloomberg - 63
Runner-Up: Markit - 60

Innovation

Winner: Bloomberg - 69
Runner-Up: Markit - 64

Timeliness

Winner: Bloomberg - 72
Runner-Up: Thomson Reuters - 69

Transparency

Winner: Bloomberg - 65
Runner-Up: Markit - 63

Value for Money

Winner: Bloomberg - 69
Runner-Up: Thomson Reuters - 63

To access the full summary report, go to: http://www.a-teamgroup.com/valuations

For redistribution rights (free with permission) contact Martyn Hodges on martyn.hodges(at)a-teamgroup(dot)com.

About A-Team Group

A-Team Group is a publishing, research and events company focusing on the use of IT in financial markets. It offers a range of business intelligence services in reference data, risk IT, low-latency infrastructure and electronic trading. For more information, go to http://www.a-teamgroup.com.

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Angela Wilbraham
A-Team Group
+44 (0)20 8090 2055
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