One very significant piece of the puzzle that we feel has not been addressed as far as the small investment management shop is concerned is the availability of an affordable, sophisticated Portfolio and Order Management System (OMS).  The OMS provides the investment manager with an absolutely essential tool for maintaining accurate portfolio information and generating error free and accurate trade blotters.  Trading errors can kill or cripple a small shop (even large managers are susceptible to damage from trading errors).  Consider the scenario where you’ve just sold 20,000 shares of company that you don’t actually have a long position in (due to a mismatched ticker in your trade blotter or an undetected ticker change perhaps).  Now imagine the pain of buying back those 20,000 shares on the open market after the price has risen 20% since you discovered your error.  A good OMS will provide you the tools required to safeguard your firm against costly trading errors.

In addition to protecting your firm from costly trading errors, an OMS will provide seamless integration to custodians, prime brokers and executing brokers, will allow you to easily create, verify, and execute trade blotters across one or more client portfolios, and much more.

There are numerous systems available from established vendors but these systems almost exclusively target large managers and are thusly, very expensive and overly complex.  TwinPOMS®, our flagship OMS, provides the sophisticated toolset that is required in today’s fast-paced and ever changing investment arena.

TwinPOMS – The Portfolio and Order Management System designed BY money managers FOR money managers

Small investment management firms and hedge funds require sophisticated OMS tools as much as their larger brethren.  In fact, due to the limited manpower at the smaller shops, some may say they have a greater requirement due to the efficiency a good OMS can provide. 

TwinPOMS is an extremely sophisticated tool that can provide the small manager with the same capabilities found only in higher end (i.e. more expensive) systems. 

Portfolio Monitoring

At its core, TwinPOMS provides you with a rich set of portfolio management capabilities designed to allow you maintain a solid understanding of your portfolios.  What are my big winners/losers?  How long have I been short Microsoft?  Do I reconcile with my custodian(s)? What is the hedge between my long and short portfolio?  What is the unrealized P/L of our position in Merck?  These questions and many more can be easily answered via the familiar TwinPOMS Windows Explorer style interface.  Highlights of TwinPOMS portfolio monitoring include:

·        Support for an unlimited number of investment products

·        Support for an unlimited number of individual portfolios within each product

·        Support for an unlimited number of custodial, prime broker, and broker relationships.

·        Intra-day tracking of product/portfolio performance

·        Quick drill down capability to the portfolio position level

·        Detail portfolio view including shares, weights, intra-day P/L, unrealized P/L, current Alpha, and number of days held in the portfolio

·        View positions at the aggregated or trade lot level

·        Quick sorting on any of the aforementioned categories

·        Easy reconciliation to any text position file provided by prime brokers/custodians

·        Seamless ticker change processing

·        Historical portfolio information always available

Portfolio Characteristics

What is my portfolio exposure to my Alpha?  What are my sector bets relative to the S&P 500?  What happens to my portfolio's size exposure if I reduce my position in Microsoft?  The TwinPOMS Portfolio Characteristics module can answer these and countless other questions in an easy to use "what-if" environment.  It's tight integration with the OMS system allows you to easily turn what if scenarios into actual trade blotters with the click of a mouse.

Trade Order Management

A good OMS will provide you with the capability to compete in today’s sophisticated trading environments.  T+1, onshore and offshore investment vehicles, client trading restrictions, compliance issues, and multiple custodians and/or executing brokers (to mention a few), all contribute to adding complexity to your portfolio rebalancing.

You’ll want a system that can generate a set of trade orders required to arrive at a “target” portfolio (e.g. an optimized portfolio) from your existing portfolio.  Or, maybe you’ll want a system that can simply read in a list of trade orders (e.g. transactions generated from a portfolio optimization).  Maybe you’ll want to clone a set of trade orders from a single portfolio to one or more additional portfolios.  Maybe you’ll want to allocate a portion of your trade orders to Broker A, another portion to Broker B, and so on.  No matter what your trading needs, TwinPOMS provides the solution.

TwinPOMS provides a rich suite of tools that allow you to keep a firm grip on your portfolio rebalancing process.  Some of the features of the TwinPOMS trade order management tool are:

·        Generate a trade blotter dynamically by comparing an existing portfolio to a target portfolio and identifying the orders required to arrive at the target portfolio

·        Generate a trade blotter dynamically by reading in a file containing one or more trade orders

·        Generate a trade blotter manually through the interactive point and click interface

·        Identification of "Risk Arbitrage" names in the trade blotter

·        Identification of "Difficult to Borrow" names in the trade blotter when attempting to sell short

·        Identification of "Exclusion List" names (i.e. names on client specific "do not trade" lists)

·        Robust error detection logic strictly enforced when entering trade orders

·        Multi-user trade blotters with one user having write access while all others have read only access

·        Sophisticated cloning feature that allows the portfolio manager to clone single or multiple orders to one or more portfolios

·        Easy broker reassignment

·        Trade blotter information at the order, blotter, client, and broker level

·        Numerous reports available for easy electronic delivery of order instructions to executing brokers

·        Robust trade capture feature that allows for easy and secure loading of executed trades back into the blotter

·        Trade allocation logic that allocates executed trades to all participating clients based on their original percentage of the original order

·        Trade "BOOK" feature that finalizes trades and records transactions in client portfolios

·        Sophisticated Cancel/Rebook logic

The  TEAM SYSTEMS Advantage

As a small investment manager or an emerging hedge fund manager you have faced and will face many important decisions in the near future.  At TEAM SYSTEMS we feel that no decision will be as important as the choice to adopt an OMS platform.  Should you continue to use your Excel based spreadsheets or license an existing platform?  As you have no doubt found, spreadsheets just aren’t capable of handling a multi portfolio, multi custodial investment strategy. 

If you choose to license an existing system, which system is right for you?  Do you want one that was designed for a multi asset class, multi currency, and global asset manager - one that is over engineered and over priced for your needs?  Or do you need a sophisticated equity only system that is powerful yet affordable?

We offer a trial usage period for interested parties.  Contact us for details.

For more information, including screen shots of TwinPOMS click here.

Click here for a list of all available TEAM SYSTEMS documents.  All documents are in Adobe pdf format.