Salt Rock Capital Partners Implements Eze Portfolio Management & Accounting
Global macro hedge fund positions Eze's Portfolio Management & Accounting System at the hub of its middle- and back-office operations.
About Salt Rock Capital Partners
Salt Rock Capital Partners, based in London, was formed in 2013 to provide a discretionary global macro investing strategy. It was started by experienced fund manager Mark Painting, with co-founder Rowan Levy heading up the operations side. Soon after launch, they set up managed accounts, which enabled them to grow quickly to an AUM of over $300MM.
The Challenge
Salt Rock invests in developed and liquid emerging markets, across multiple asset classes and time horizons.
Strategically, it focuses on policy and policy changes, and trades in the best risk-adjusted opportunities that these give rise to. In terms of asset classes and instrument types, it normally trades FX (spots, forwards, and OTC options), equity, rates, index and commodity futures and options, along with some IRSs and single name equities added into the mix.
In order to operate efficiently and demonstrate credibility, Salt Rock knew that "having a good portfolio management system was absolutely critical from the outset,” said co-founder Rowan Levy. “It’s a prerequisite to qualify for investors’ consideration, and for the establishment of managed accounts.”
Painting and Levy were looking for a system that would serve as the backbone of the firm, managing all of the middle- and back-office operations.
Key selection criteria were support for all the instrument types they trade, along with an efficient trade processing workflow and good connectivity support. They needed to interface with their prime brokers, fund administrator and managed account administrators for file exports and reconciliation. They also needed the ability to handle multiple price sources and easily expand their connections in the future.
In addition, Salt Rock required integration with RiskMetrics in order to feed portfolio data into the risk platform for analysis. Levy explained, “We wanted a system that was quick to get going, but could allow us to bolt on additional capabilities, features and interfaces without huge costs and lengthy implementation periods.”
The Selection Process
The founders considered a wide range of providers, but ultimately selected Eze as the best fit for their requirements.
“We love the flexible connectivity framework,” said Levy. “It is a lot easier to configure imports and exports than it is with other systems, which makes a huge difference to us.”
In addition, the multi-way transaction, position, and cash reconciliation tools and the configurable reporting suite, enables them to create workflows that suit their specific needs. “We also like that upgrades are very easy, quick, and cost-effective when compared with our experience with other providers,” said Levy.
Based on their experience using Eze at previous funds, they were confident that the service team would make it happen on time and on budget. “All these factors meant that Eze Software was the obvious choice,” said Levy.
Solution & Implementation
Salt Rock uses Eze Portfolio Management & Accounting across the front and back office
The operations team handles post-trade operations, portfolio accounting and reporting tasks. The trading team monitors the real-time P&L view, and the portfolio managers monitor their positions, NAV, P&L, cash flow, exposure, and other key measures using the advanced reporting tools.
The implementation took place in two phases. The first phase involved installation, importing test data, setting up the interfaces, implementing a standard RiskMetrics integration, and new user training. After a successful go-live, the Eze client services team moved on to the second phase, which involved setting up managed accounts and an enhancement to provide user configurable security level grouping when viewing risk data in RiskMetrics.
“We were very impressed with the implementation process and how efficient the Eze Software team was. We also liked that they worked with us to build new interfaces by leveraging existing ones they’ve built for other clients and configuring them for our specific needs,” said Levy. “We’re always happy to partner with Eze Software when improving the connectivity they’ve currently got, such as a data integration for one of our managed accounts, which was completed incredibly quickly.”
Eze Investment Suite Overview
Eze Portfolio Management & Accounting Overview
Demonstrate operational excellence with clear and accurate reporting and streamline middle- and back-office workflows.
The Results
Salt Rock was very pleased with the roll-out and the end result.
“It was very simple to set up and get going quickly, with low risk,” said Levy. “Now that the system is up and running, it’s easy-to-use, efficient, and gives us plenty of flexibility for the future.”
According to Levy, the benefits are all about workflow. They can now quickly and easily reconcile positions and cash, and are able to fully automate the distribution of trade data between prime brokers and fund administrators. “This saves us a lot of time and makes a real day to day difference,” said Levy.
So, what would Salt Rock say to other firms looking to select a technology provider? “I would highly recommend Eze Software, particularly for their excellent service,” said Levy. “We are a highly motivated, customer-focused business, and if there’s something we need, Eze Software is able to help us quickly and respond in kind. We’ve built a great relationship with the Eze Software team over the last four years, and we like the fact that many key people have been with the firm for years, and the continuity that brings. When we call, the team knows who we are, and you don’t get that in every relationship.”