Clearwater Analytics® Adds Deutsche Bank Securities Lending Fund to Money Fund Transparency Platform08-Jul-2009
Addition strengthens DB Advisors' commitment to providing increased transparency for risk analytics, portfolio holdings and performance metrics
BOISE, IDAHO (July 8, 2009) — Clearwater Analytics, a leading provider of web-based investment portfolio reporting, announced the availability of a securities lending fund managed by DB Advisors on the Money Fund Transparency platform.
Created in response to investor demand for increased disclosure and transparency, Clearwater's platform presents risk analytics, portfolio holdings and performance metrics online in an easily accessible, legible, and consistent format permitting efficient fund analysis, comparison, and selection. The risk analytics include exposure to issuers, sectors, asset classes, credit ratings, duration and other critical measures. The platform also provides detailed qualitative information on the fund, the manager, and the organization as a whole. The reporting on all participating funds is available to investors on the Clearwater website, on money fund portal websites and on participating fund managers' websites.
Turmoil in the financial markets has driven a flight to quality and liquidity and has increased the demand for transparency by investors. While there has been a great deal of attention paid to money market mutual funds and their proposed regulatory reform, there is an equal if not greater need for transparency including risk analytics and portfolio holdings disclosures in funds that are designed for the reinvestment of cash collateral for securities lending programs.
"Building on the initial success and strong support we have received from our clients regarding the Money Fund Transparency initiative, we are expanding our participating funds to include our Daily Assets Fund portfolio for securities lending collateral" explains Kevin Bannerton, Head of Liquidity Management Distribution, Americas, for DB Advisors. "Beneficial owners and agent lenders alike are keenly aware of the importance of prudent management for their cash collateral reinvestments. Providing investors the ability to evaluate and monitor portfolio risk is a critical component in determining the appropriate investment vehicles and improving oversight of the overall securities lending program. The various proposals aimed at improving the safety, security and disclosure for 2a-7 money market funds only reinforces our initial decision to provide enhanced reporting for our clients and help to set the standard for the overall industry."
The Daily Assets Fund is now a registered money market fund that is Aaa rated and complies fully with 2a-7 guidelines. This, however, is the exception, rather than the norm. The majority of cash collateral backing securities lending activities tends to be managed in non-registered private funds or separate accounts in a manner more consistent with enhanced cash mandates that are significantly more risky than 2a-7 money market funds.
As became apparent during the recent crises, many of these funds experienced significant liquidity pressure, valuation issues and large investment losses caused by impaired securities in their portfolios.
"I believe many investors were surprised to discover that their securities lending cash collateral funds were really enhanced cash funds and much more risky than they anticipated," says Matt Clay, head of commingled fund solutions at Clearwater Analytics. As a result several institutions have temporarily suspended or exited their securities lending programs altogether. There are certain asymmetric risks in the securities lending industry that can create conflicts in the way the programs are administered and cash collateral invested. Transparent reporting is a vital component in helping to manage those conflicts.
Clay continued, "When it comes to securities lending programs, we need greater transparency on both sides of the equation, including the liability side as well as the cash reinvestment side. Money Fund Transparency is a robust reporting solution for cash collateral pools and Clearwater is working with its partners to further develop solutions for the liability side of the equation as well."
"Institutional investors and beneficial owners participating in securities lending programs will appreciate the significance of providing this level of enhanced reporting," says Courtland Gates, CEO of Clearwater Analytics. "DB Advisors continues to demonstrate industry leadership in providing their investors with unparalleled access to valuable portfolio information."
About Clearwater Analytics
Clearwater Analytics® is a recognized leader in daily, web-based investment portfolio reporting and analytics. The company's industry-leading technology is the only platform on the market to offer a complete solution for dynamically monitoring global investments on a daily basis. Clearwater's technology platform aggregates and reconciles investment portfolio transaction and holdings information from safekeeping entities, integrates third party data, and generates transparent reporting and analytics for investors, investment managers, custody banks and transaction execution portals. Launched in 2003, Clearwater Analytics reports on nearly $400 billion in assets for more than 2,000 institutional investors.