Bloomberg AIMs enhancements on portfolio implementation, trade management

Bloomberg has been making updates for portfolio implementation and trade order management workflows on AIM, its order management system (OMS) for the buy side.

“We have been re-engineering core parts of our OMS, allowing us to handle increasingly complex workflows and throughput expectations of our most demanding clients,” says Ian Peckett, Bloomberg’s global head of buy-side product.  

Among the changes made to the portfolio implementation process are improved liquidity insights for clients, as AIM now embeds details about the inventory of available securities right at the start of the process. Previously, if a client wanted to buy a bond, they had to follow a two-step process: first deciding what to buy, and then evaluating the inventory of available securities—which could impact a trade’s feasibility.

By collapsing it into a single, integrated workflow, information about the inventory of assets is available before the point of decision for a given trade. Peckett says this provides early transparency so a buy-side trader can make an investment decision already armed with all the requisite information.

“To overcome liquidity fragmentation challenges, this brings real-time dealer inventory transparency upstream in the investment process to ensure portfolio managers and traders are running optimizations on securities they can actually trade,” Peckett says. 

Another change within the portfolio implementation workflow has been how compliance validation is carried out on the platform, incorporating client constraints and mandates earlier into the decision-making process. It includes factoring in compliance limits into the order-generation process instead of waiting until after a trader has modeled a trade to detect potential violations. 

What used to be a multi-step and, sometimes, iterative process for portfolio implementation—building the desired trade list, evaluating compliance constraints, going to market to understand the availability of securities—can now run as one combined process. “This is increasingly important as clients continue to include more asset classes and run a higher number of bespoke portfolios for their end-clients. By increasing the sophistication of our process, we aim to bring simplicity even to the most complex clients’ needs,” Peckett says. 

Post-Trade Anomaly Detection  

The second area of the AIM platform that has been updated relates to trade management and operations for portfolio managers and traders. The company is now providing portfolio managers with “in-flight” updates on execution statuses and the resulting effect on cash balances instead of providing this information once a trade has been fully executed.

Last year, it also deployed a trade processing automation tool, TC Auto Flow. This tool automates key parts of the post-trade process and utilizes machine learning to proactively alert users to anomalous trades.

The portfolio and trade management updates on AIM are in anticipation of what Bloomberg believes will be long-term changes in its clients’ investment behavior due to continued expected growth in complex investment strategies, and the growth of systematic investment—a type of rules-based approach to investment management.  

“We are seeing the influence of passive [investment] starting to permeate into the active space with things like systematic investing and factor-based investing,” Peckett says.

“That is leading to larger, more frequent, and complex portfolio rebalances, so we are enhancing our order management functionality to help clients handle these growing volumes.” 

The new features are part of a large, continuous process of updates for the platform. Peckett says Bloomberg provides around 200 updates for the solutions it provides to buy-side clients in a year.