Its transition project was complex in both its trading and operational outlook, with the global equity transition undertaken in a KVG structure that required simultaneous trading in seven different custody accounts. The in-scope assets amounted to €2.6bn, requiring €7.9bn of equity, FX and futures trading to complete the project during the heightened market volatility of the COVID-19 pandemic.
Additionally, the project was to be staged across five separate implementation dates. Detailed analysis of the portfolios was required to find the right path for trading and funding, and to identify risks while keeping implementation and opportunity costs low.
Identifying these early in the planning allowed the client the source additional funds to use during the implementation. Operationally, trades were processed across seven custody accounts with cash flows monitored for each and balances transferred accordingly to meet settlement.
Dual swifts and reporting were provided to Universal-Investment for each of the accounts daily, and we worked closely with the client’s overlay manager to ensure a seamless hedging strategy was implemented during the transition. Trading lasted four weeks and all stakeholders were pleased with the transition outcome from both an operational and a cost perspective.
Head of Portfolio Management Services, Universal-Investment-Luxembourg S.A., Frankfurt branch
Detailed, achievable timeline and identification of key risks
Costs identified and realised in line with the estimate
Futures utilised to manage exposures and control opportunity cost
High volume trade execution, settlement, and segment cash management
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