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FactSet Details Ultimate Goal of Servicing the Complete Portfolio Lifecycle

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FactSet is delivering on its aim to serve the portfolio lifecycle through acquisition, partnership, integration and a focus on providing clients with a choice of modular solutions. Previewing the year ahead, its plans include continued integration and enhancement of acquisitions Portware, Cymba and Vermilion, support for compliance with regulations including Markets in Financial Instruments Directive II (MiFID II), and increasing adoption of emerging technologies such as machine learning and artificial intelligence.

We caught up with Sean Carr, senior vice president and global market strategy director at FactSet, to discuss market challenges, client requirements and FactSet responses. Not surprisingly, Carr names regulation as a key data management challenge for many of its buy-side and sell-side customers. In terms of MiFID II, he says: “We are strong in data and analytics, we have a tool that can log conversations and we can support disclosure. Clients need to own MiFID II solutions, but we will develop more elements in more areas to help them.”

Another data management challenge is the increasing need to share consistent data across portfolio, risk and performance management functions that often operate separately. While a single golden copy data source is an unlikely short-term fix, FactSet can help functions share consistent data with a view to improving portfolio managers’ decision making processes.

Carr also talks about the ongoing problems of total cost of ownership and pressure on fees, saying: “These challenges are headwinds, but also opportunities. Firms want to work with less vendors and cut down on interfaces to reduce cost and operational risk, and increase speed. By integrating our own products and services, and those of our partners, we can provide economies of scale.”

Integration under the ‘serving the portfolio lifecycle’ banner, a catchphrase introduced at FactSet late last year, is key to development of the company’s Portware execution management system – Portware was acquired in September 2015, Cymba order management systems – Cymba Technologies was acquired in September 2016, and Vermilion client reporting – Vermilion Software was acquired in November 2016.

While Portware is already integrated with other FactSet and third-party solutions, and work to integrate Cymba and Vermilion is underway, Carr says the 2017 roadmap will continue to integrate these businesses into the FactSet framework, enhance the applications with offers such as FactSet derived security data, instrument analytics and portfolio characteristics, and realise more synergies through extended product relationships, increased technology options and more channel partnerships.

Carr describes FactSet’s acquisitions as growth opportunities rather than items in an acquisition strategy, and partnerships as a means of giving clients choice in the data feeds, services and solutions they use to support their business. He says: “Acquisitions and partnerships increase FactSet’s footprint in the market, provide ownership of certain data areas, and offer symbiotic relationships.”

Among FactSet’s 2017 recent agreements are an alliance with Narrative Science, a provider of advanced natural language generation, that will integrate Narrative Science’s automated portfolio commentary capabilities with FactSet’s analytics and client reporting platform, and an acquisition agreement with ICE that will add the latter’s Interactive Data Managed Solution to FactSet’s wealth management capability.

With over 3,000 clients – split roughly 80/20 between the buy-side and sell-side – a better than 95% retention rate, and towards 9,000 employees across 43 global offices, Carr says FactSet differentiates from competitors such as Bloomberg, Thomson Reuters, S&P Global Market Intelligence, BlackRock and Rimes, on the basis of its strong integration and service capabilities. He concludes: “FactSet wants to offer a complete, yet modular, enterprise solution that will reduce client supplier numbers and drive down costs.”

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