Some of you may have followed a ‘marmite’ celebrity reality TV show during the last three weeks. Running over the last 20 years, it follows a theme of part social experiment in a jungle environment, part televised bullying. Light entertainment or pure rubbish depending on your perspective.
What is of interest to some is what happens as contestants leave – how the camp dynamics change following a significant departure.
Of course as it is the 12 Days of Trading, there is a City parallel – portfolio construction has to allow a fair approach to all fundholders and if one becomes a little jittery about the market and wants to sell their position, there are rules to protect remaining investors from unnecessary impact in the wake of the exit door slamming.
Like the inevitable tasks in the jungle TV show, managing complex and high value fund inflows, and particularly outflows, requires dexterity, resilience and focus, particularly so under times of stress. Doing that requires input from (normalised and cleansed) market data, interwoven with calculated metrics (pre-trade market impact estimates) and client data about their portfolio, combined with the flexibility to look at a variety of (end client) trading sizes and horizons covering different market volatility and spread scenarios.
The image shows one of several dynamic dashboards we have created to help visualise specific scenarios to support client conversations.
Just like with the trials in the jungle, getting it wrong with operational issues for the fund can impact the other
campmates stakeholders. There may not be a televised vote, but the way in which these situations are handled involves risk as it has implications for the reputation and client experience for the fund manager.
If you haven’t deployed our services to automate the process to help then it ‘might be you’!
The content here has been generated by big xyt’s Portfolio Liquidity Analysis tool.