Advancements in technology have had a dramatic impact on the investment industry. The instant availability of information has made it harder for investors to gain a knowledge advantage and the broad market’s quick reaction to financial news has increased market volatility.
There has also been significant automation in trading in certain asset classes, removing many of the advantages money managers and banks traditionally had over the rest of the market. Nowhere is this more apparent that the equity market where stock exchanges have evolved from “open outcry” trading pits to electronic marketplaces where individuals and institutions alike can buy and sell stocks in a low cost and highly transparent manner.
Fixed income markets have proven more difficult to automate, the human element in trading remains, and inefficiencies in valuation and pricing still exist. However, within the corporate bond market, proprietary technology can be used to help portfolio managers screen the market to find opportunities. We believe the best way to achieve success is to pair cutting edge technological tools with expertise in hands-on portfolio management.
Since the inception of the firm, we have invested in trading and risk management systems developed with the same institutional quality as those used on bank trading desks on bank trading desks. As we have grown, we have continued to develop systems that can help identify value opportunities to augment the expertise of our credit research and portfolio management teams.
There are two key areas where we have invested in technology to help us pursue value for our investors – security selection and risk management.
There are hundreds of thousands of corporate bonds outstanding – we use proprietary technology to quickly and efficiently sift through this universe and find potentially mispriced securities. This presents RPIA with a relative advantage over other fixed income investors. Sophisticated, multi-faceted tools sitting alongside the experience of our portfolio management and research teams provides a swift first step to unlocking potential value.
When it comes to risk management, we believe the first line of defense is a seasoned portfolio management team with the right tools to analyze the portfolio. We have developed proprietary tools which enable effective real-time monitoring
of risk exposures throughout our portfolios. This enables swift and decisive decision-making, which is essential when responding to changing market conditions.
We have made an investment in the right talent and the right systems to become leaders rather than followers as the landscape changes.