Thomson Reuters and BlackRock have joined forces to deliver fixed income derived analytics based on security indicative data and prices from the market data vendor and proprietary fixed income models designed by BlackRock Solutions. The models are used by BlackRock itself, as well as by customers of BlackRock Solutions’ Aladdin enterprise investment system.
Thomson Reuters and BlackRock have worked together for over 20 years. But Thomson Reuters Fixed Income Derived Analytics powered by BlackRock Solutions is the first product they have developed together and taken to market.
The aim is to provide a turnkey solution to help institutional asset managers, hedge funds, banks, insurance companies, sovereign wealth funds, corporate treasuries and family offices better validate and manage their fixed income portfolios to mitigate portfolio risk. This can be particularly costly and time-consuming to handle in-house, particularly when it involves valuation and risk analysis of complex fixed income instruments.
Neil Masterson, managing director and head of Investors at Thomson Reuters, explains: “Market need for the fixed income derived analytics product comes from asset managers in fixed income investments working in a low return environment. They want to reach into markets where there is a higher return, but portfolio diversity increases the requirement for risk analytics. Our proposition is based on BlackRock Solutions’ position as a leader in fixed income analytics and Thomson Reuters’ content factory that aggregates data and its large global footprint that distributes data. Joining together, we can market a turnkey solution that includes the best from both companies.”
The derived analytics provide users with key security level market risk measures that support the understanding and analysis of underlying risk in fixed income portfolios. The analytics are sourced using Thomson Reuters DataScope data and pricing, and created via BlackRock Solutions’ analytics infrastructure Aladdin using best-in-class interest rate, credit, mortgage and risk models that are used by BlackRock and its clients every day. Thomson Reuters and BlackRock Solutions have also created a virtual feedback loop to continuously refine and validate the data to ensure the highest possible quality data is available to the market.
The fixed income derived analytics are available immediately and initially cover government bonds, agency bonds, corporate bonds, US mortgage pools, convertible debt/preferred stock and US CMBS securities. Institutional clients can access the analytics via the Thomson Reuters DataScope Select data delivery platform or from Thomson Reuters DataScope, the deployed version of the data delivery platform.
Robert Goldstein, senior managing director and head of Blackrock’s Institutional business and BlackRock Solutions, says: “Customers using these analytics to manage portfolios should feel confident that they have the most accurate view of the securities and instruments they hold as these are the same derived analytics that BlackRock and its clients use to manage their portfolios.”
Goldstein suggests there is no direct competition to the companies’ fixed income derived analytics solution in the market, but acknowledges that some vendors offer subsets of the solution. He also notes that marketing the solution to other institutional firms does not create competition issues for BlackRock as the key security level market risk parameters being offered are only a starting point and other factors must also be included before decisions on portfolios can be made. Instead, he says: “This is an amazing opportunity to make our analytics available to a broader client market.”
While this is Thomson Reuters’ and BlackRock Solutions’ first joint product and one that is particularly apposite as it plays into both companies’ strengths in a challenging market, Goldstein says ‘never say never’ to further joint products covering other asset classes, and concludes: “If a product is properly executed, the next step becomes obvious.”