Rapid advancements in technology and the expansion into new segments of its traditional client base have created a new transition management paradigm, says BNY ConvergEx Groups Global Transition Management business.
The evolution of trading and risk management technology has shifted the primary focus of transition management from operations to risk management, with the preservation of the value of a clients assets the most important aspect of the transition. BNY Global Transition Management recently held a series of thought leadership roundtables dedicated to these themes and their importance to transition management.
In a new report on transition management by TABB Group, analyst Monica Schulz has drawn similar conclusions. The report, titled “The Optimal Transition: Mitigating Risk and Minimizing Market Impact,” explores the current state of the transition management industry. The report analyses the major components of the portfolio transitioning process, including trends in transition management usage, differentiators between providers, and expected future demand of transition management services.
According to TABB Group, the introduction of new trading technologies, such as dark pools and crossing systems, have helped to minimise the execution risks associated with information leakage and opportunity cost.
“The ability to provide enhanced liquidity and minimize market impact are crucial factors in ensuring a successful transition. Our multi-asset agency-only trading capabilities and investment technology products, including the VortExSM dark liquidity aggregator and ConvergEx Cross block crossing system, give BNY Global Transition Management a truly unique set of solutions to bring value to clients,” says Carey S. Pack, CEO, BNY ConvergEx Execution Solutions.
“As the report makes clear, the decision to implement a change in investment strategy is a very significant event for asset owners, both because of its long-term impact on investment performance and the potential risk it can hold for the underlying asset owners. We concentrate on minimising risk during the transition process through the use of TOPx, which is our transition optimisation algorithm, as well as advanced transition analytic tools and comprehensive hedging strategies that preserve the value of the clients investment decisions,” adds Kal Bassily, CFA, managing director and global head, BNY Global Transition Management.
BNY Global Transition Management recently received eleven “Best in Class rankings in Plan Sponsor Magazines 2008 Transition Management Survey, including wins for best in Pre-Trade, best in Execution, best in Post-Trade and best in Organization & Support, as well as a sweep of the Endowments, Foundations, and Nonprofits category.