Markit Group Limited has launched a Present Value (PV) Service, designed to provide hedge funds, traditional asset managers and fund administrators with Net Asset Value of their credit derivative portfolios.
The PV Service is an automated service, offered over a secure Web site connection. Users can submit trade data at any time, either from a spreadsheet or via XML, with no additional software.
Trades are priced using Markit’s average mark-to-market prices taken from the main dealers in the credit default swap (CDS) market, and an independent valuation is supplied back to the user. CDS positions in the user portfolio are tagged with the market-standard RED (Reference Entity Database) codes.
The PV Service values a range of credit derivative products, including CDS and index trades. Bespoke synthetic CDO baskets and tranched index trades are expected to be included in the service in the second half of 2005.
“Markit’s PV Service lends a high degree of integrity to a valuations process required of all market participants, saving time and eliminating manual spreadsheet calculations which often lead to pricing errors,” David Hampson, controller at Anchorage Capital, said.
Kevin Gould, executive vice president of Markit, said, “The service is aimed at any institution that does not want to go to the expense of setting up internal valuation systems and then integrating external, independent data. Markit can now supply this service very simply, allowing a portfolio of trades to be valued, with our dataset, at the push of a button. The process is quick, easy and cheap.”