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Business Knowledge for IT in Investment Management: A Complete Handbook for IT Professionals

Book Description

A revolution is afoot in the IT industry; there is no denying the fact. IT professionals that are forward-thinking are embracing this revolution; they realise that business knowledge is the lifeblood of a successful and fulfilling career in IT. Against this backdrop, Essvale Corporation Limited presents "Business Knowledge for IT in Investment Management", designed to deliver the required business knowledge to discerning IT professionals in the Investment Management industry.The 12 chapters in this book cover the following topics: an overview of Investment management; recent trends in Investment management; the business environment in Investment Management; major players in the Investment management industry; the common systems used in Investment management; and, the future of IT and business in Investment management.

Table of Contents

  1. Copyright
  2. Preface
  3. Acknowledgements
  4. Introduction
    1. Why is business knowledge of investment management important?
  5. 1. Overview of Investment Management
    1. Introduction
    2. Definition of Investment Management
    3. Market Value of the Global Investment Management industry
    4. Top Twenty Global Managers
    5. Overview of the UK Investment Management Industry
      1. Advantages of UK in general as a centre for Fund Management
    6. Largest UK Fund Management Organisations
      1. Ownership
    7. Staff of the Investment Management Firms
    8. Fundamentals of the Investment Management Function
      1. Stage one – initial client liaison
      2. Stage two – apportioning responsibility
      3. Stage three – research
      4. Stage four – the decision-making process
      5. Stage five – execution of transactions
      6. Stage six – custody
      7. Stage seven – reporting to clients
    9. Central Task of Investment Management
    10. How Investment Management Firms Generate Revenue
    11. Asset Classes
    12. Major Investors
      1. List of Some Major Investment Management Firms
    13. Boutique Investment Management Firms
      1. Definition of Boutique Investment Management
      2. Characteristics of Boutique Investment Management
      3. Advantages of Boutique Funds
      4. Disadvantages of Boutique Funds
      5. List of some Boutique Investment Management Firms
  6. 2. Types of Funds in Investment Management
    1. Introduction
    2. What is a Fund?
    3. Open-ended and closed-ended funds
    4. Types of Funds
      1. Life Funds
      2. Pension Funds
      3. Unit Trusts
      4. Investment Trusts
      5. Common Investment Funds
      6. Offshore Funds
      7. Index Funds
      8. Exchange-Traded Funds
      9. Venture Capital Trusts
      10. Property Funds
      11. Hedge Funds
      12. Fund of Funds
    5. Fund Fact Sheet
    6. Associated Costs
      1. Investor Costs
    7. IMA Sector Definitions and Classification
      1. UK Sector Classification
    8. Creation of Funds
    9. Indices
      1. What are Indices?
        1. Definition
        2. FTSE
        3. Major World Stock Market Indices
        4. MSCI Europe Index
        5. Goldman Sachs Commodity Index
        6. iTraxx
      2. Arithmetic of Indices
        1. Example
    10. Security Identifier Types
      1. Definition
      2. ISIN
      3. CUSIP
      4. RIC
  7. 3. The Business Environment in Investment Management
    1. Introduction
      1. Interest Rates
      2. Inflation and Money Supply
      3. Government Fiscal Policy
      4. Exchange Rates
      5. Stock Market
      6. Use of Technology
    2. Players in Investment Management
      1. Exchanges and Government Central Banks
        1. London Stock Exchange
        2. European Central Bank
      2. The Competitors
    3. Overview of the Major Players in Investment Management
      1. UBS AG
      2. Allianz SE
      3. State Street Corporation
      4. Barclays PLC
      5. Investment Management Association
    4. Allied Organisations
      1. The Regulators
        1. Bank of England
        2. Financial Services Authority
        3. Bank for International Settlements
    5. Accounting and Auditing Organisation for Islamic Financial Institutions
      1. The Committee of European Securities Regulators (CESR)
      2. Electronic Communication Networks (ECN)
      3. Liquidity Pools
    6. The Credit Rating Agencies
      1. Uses of Credit Rating Agencies
      2. Moody’s
      3. Moody’s Ratings
        1. Long-term Obligation Ratings
      4. Investment grade
      5. Speculative grade
        1. Special
      6. Short-term Ratings
      7. Standard and Poor’s
        1. Credit ratings
      8. Long-term Credit Ratings
        1. Investment Grade
        2. Non-Investment Grade (also known as junk bonds)
    7. News Agencies and Data Providers
      1. What are News Agencies?
      2. Reuters
      3. Bloomberg
      4. Financial Express
      5. Markit
      6. The Financial Times
      7. FTfm
      8. Morgan Stanley Capital International (MCSI)
      9. Investment Property Databank
      10. International Index Company
    8. Clearing Houses
      1. What is a Clearing House?
        1. London Clearing House
    9. Settlement Banks
      1. What is a Settlement Bank?
        1. Euroclear
      2. Clearstream
      3. DTCC
  8. 4. Trends in Investment Management
    1. Introduction
    2. Introduction of MiFID
      1. What is MiFID?
      2. Stated Aims of the European Union
      3. Impacts on Investment Management Firms
      4. Impacts on IT in Investment Management
    3. Sarbanes-Oxley Act of 2002
    4. The Introduction of Hedge Fund Clones
      1. What is a Hedge Fund Clone?
    5. Growth of ETF Market
      1. What are Exchange Traded Funds?
      2. Market Segmentation
    6. Popularity of LDI
      1. Definition of LDI
    7. Socially Responsible Investing
      1. Screening
      2. Preference
      3. Engagement
      4. Socially Responsible Investment Index Trackers
      5. Unit/policy holder data from 1997
    8. Emergence of BRIC Investment Funds
      1. Some Facts about “BRIC” Countries
      2. Downside to Investing in BRIC Funds
    9. Flow of Funds to Gulf States
    10. Popularity of Property Funds
    11. Popularity of 130/30 Investment Strategy
    12. The Introduction of the Revised Investment Performance Standards
      1. What are GIPS?
      2. Countries that endorse the GIPS Standard
    13. UCITS III Regulations
      1. Background
        1. Management Directive
        2. Product Directive
      2. Eligible Assets
      3. Derivatives
        1. Commitment Approach
        2. Value at Risk
      4. Principles-based Regulation
      5. Implications of UCITS III on Information Technology
        1. Full Instrument Coverage
        2. Valuation and Reconciliation
        3. Investment Risk monitoring
        4. Comprehensive Data Management support
        5. Document Management
        6. Compliance Monitoring and Incident Resolution Workflow
        7. Flexible Solutions
    14. Growth of Islamic Asset Management
      1. Definition
    15. Introduction of IAS 39
      1. Impact of IAS 39 on Investment Managers
    16. The Emergence of Currency as an Asset Class in Investment Management
    17. Exploring the Potential of Exchange Traded Commodities for UCITS
      1. Direct versus indirect commodities investment
      2. Development of the UCITS directive and commodity markets
        1. Typical Features
      3. Exchange Traded Commodities
  9. 5. Overview of Portfolio Management and Administration
    1. Introduction
      1. Definitions of Portfolio Management
    2. Investor Requirements
    3. Asset Allocation
      1. Example of Asset Allocation
    4. Stock Selection
    5. Investment Styles
      1. Active Management
      2. Advantages of Active Management
      3. Disadvantages of Active Management
      4. Passive Management
      5. Reasons for Choosing this Strategy
      6. How do Investment Managers implement Passive Investing?
    6. Portfolio Administration
      1. Best Execution
      2. Settlement and Delivery
      3. Registration
      4. Custody
      5. Use of Nominees
      6. Records and Regulation
      7. Portfolio Accounting and Controls
      8. Profits, income and taxation
      9. Valuation and pricing
  10. 6. Investor Relations
    1. Investor Administration
      1. Outsourcing
      2. Dealing
      3. Registration
      4. Communication
        1. Reporting
      5. Distribution
      6. Changes
      7. Charges
      8. Fund Mergers
      9. Conversion
      10. Meetings
    2. Performance Management
      1. Sector Comparison
      2. S&P Fund Rating Process
        1. Comparison of apples to apples
      3. Identification of consistent performers in each asset class
      4. Identification of disciplined, experienced management
      5. Ratings
      6. Incorporate quantitative data with qualitative research
        1. Organisational strength
        2. Fund management team
        3. Fund management/style consistency
        4. Portfolio construction
        5. Performance
      7. Monitor funds on a continuous basis
      8. A new standard for investment fund research
      9. How to tell when a good fund turns bad
        1. Sustained underperformance
      10. Yields and Returns
      11. Benchmarking
        1. Volatility
      12. Risk-adjusted Performance Management
  11. 7. Derivatives Operations in the Investment Management Industry
    1. Derivative Operations
      1. Pre-trade approval
      2. Transaction capture
      3. Pricing
      4. Margin and collateral payments
      5. Event and life-cycle management
      6. Specific operational challenges
    2. Functions of Custodians in OTC Derivatives Trade
      1. Contract Maintenance
      2. Event Processing
      3. Valuation and Payment Calculation
      4. Payment and Settlement
      5. Reconciliation
      6. Collateral management
      7. Account Maintenance
      8. Miscellaneous Reporting Activities
      9. Innovations in the industry
  12. 8. Systems used in Investment Management
    1. Introduction
    2. Notable Systems Used In Investment Management
      1. Vendor: LatentZero
        1. System: Capstone
          1. Overview
        2. Capstone Tesseract
        3. Capstone Sentinel™
        4. Capstone Minerva
      2. Vendor: Charles River Development
        1. System: Charles River Investment Management System
          1. Overview of Charles River and its System
        2. The Charles River Investment Management System (Charles River IMS)
        3. Technology and Architecture
        4. Who uses Charles River IMS?
        5. What are its unique features?
      3. System: Statpro
        1. Vendor: Statpro
          1. Overview
      4. System: Linedata
        1. Vendor: Linedata Services
          1. Overview
        2. Front Office Solutions
        3. Fund Accounting Solutions
        4. Transfer Agency Solutions
      5. Vendor: DST International (DSTi)
        1. System: DSTi Investment Management Solutions
          1. Overview
        2. Products
    3. Key market trends that affect Investment Managers and Solutions Providers
      1. Execution Management/Best Execution
      2. Growth in Buy-Side Derivative Trading
      3. Regulation
  13. 9. IT Project Types
    1. Introduction
    2. Common Types of IT Projects
    3. Case Studies on IT projects in Investment Management
      1. BIGFUND Asset Management Group Implementation of Sentinel
        1. The compliance challenge
        2. Solving the problem with Capstone Sentinel
      2. Results
      3. BizInvest Implementation of Minerva
        1. Background
        2. Integrating legacy systems
        3. Connectivity and usability
        4. Implementation
        5. Results
    4. Cutting Edge Technology
      1. What is SOA?
      2. Adoption of SOA in Investment Management
        1. Why SOA?
        2. A typical scenario is described below
        3. Problem
        4. Solution
      3. Case Study: BigFund Investment Managers/Outsoz Global Investors
      4. Data Requirements
  14. 10. Commonly Used Terms in Investment Management
    1. Introduction
    2. List of Terms
  15. 11. Methodologies, Skills and Tools
    1. Introduction
    2. Methodologies
      1. Capability Maturity Model (CMM)
      2. V-Model
      3. RUP
      4. PRINCE 2
      5. UML
      6. RAD
      7. Core Elements of RAD
      8. Agile
      9. Extreme Programming
      10. Pair Programming
    3. Business and Systems Analysis Methods
      1. Business rules approach
      2. Entity-relationship diagrams
      3. Prototyping
    4. Testing Methods
      1. Equivalence Partitioning
      2. Boundary Value Analysis
      3. Error Guessing
    5. Tools
      1. IBM Rational Rose
      2. IBM Rational ClearCase
      3. Mercury QTP
      4. IBM Rational ClearQuest
      5. Mercury Test Director (Quality Centre)
      6. Oracle Designer
      7. PowerDesigner
    6. Common IT Skills Required
    7. Soft Skills
  16. 12. The Future
    1. The Future: What does it hold for Investment Management in Business and IT?
      1. Globalisation and Consolidation
      2. Promotion of Compliance
      3. Product Innovation
      4. Role of Custodians in Investment Management
      5. Consolidation of Islamic Asset Management
      6. Outsourcing to New Labour Markets
      7. Post MiFID IT Challenges
      8. Better Operational Risk Control
    2. Conclusion
  17. Appendix
    1. Sector Classifications
      1. Funds principally targeting income – Immediate Income
      2. Funds principally targeting income – Growing Income
      3. Funds principally targeting capital – Capital Growth/Total Return
      4. Funds principally targeting capital protection
      5. Specialist Sectors
    2. Specialist Recruitment Agencies
    3. Bibliography
      1.  
  18. Other Titles in the Bizle Professional Series