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How The Smart Cube helped a leading asset management firm enhance its asset selection capability and improve its portfolio

  • Client:

    Leading US-based investment firm

  • Industry:

    Financial Services

Key highlights
  • A leading asset management firm identified The Smart Cube as an ideal partner to provide a cost-effective solution for enhancing its credit research capabilities
  • The partnership has evolved over four years, with The Smart Cube team expanding from two to six analysts
  • The client has realised cost savings of over 40% through leveraging the offshore research team, compared to extending internal resources
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Business challenge

A leading asset management firm (investing in investment grade and high-yield issuers across both developed and emerging markets) wanted to enhance its fixed income portfolios and drive faster investment decision-making.

To enable this, the business sought a partner which could provide:

  • A cost-effective solution for enhancing credit research and intelligence
  • Regular, consistent research and notifications to monitor the portfolio constituents
  • A digital platform through which it could access research and receive alerts on any events affecting the portfolio constituents

The Smart Cube solution

The Smart Cube was chosen as an expert financial services partner to provide credit research and insights around new investment ideas, and to enable monitoring of the portfolio on an ongoing basis.

A dedicated team of experienced credit research analysts was assigned to deliver fundamental and technical analysis across investment grade and high-yield issuers, supported by a project manager to monitor workflow and resource utilisation, and ensure maintenance of a high quality of research and client service.

The analysts work on a wide variety of research tasks across industries, from financial modelling and issuer assessment, to sector analysis and technical bond recommendations. The team also provides regular updates on the portfolio issuers (including earnings, events and M&A transactions), as well as quarterly macro updates.

The Smart Cube leverages its proprietary Credit Solution portal to provide client users with access to all research produced by its analysts, and the customised digital interface delivers bespoke alerts and notifications on the portfolio constituents.

The Smart Cube analysts engage and work with the firm’s internal research team and portfolio managers to provide a seamless experience during all research and modelling projects – operating as a direct extension of the client’s in-house team.

The partnership has evolved over four years, and The Smart Cube team has grown in size from two to six analysts, who now cover more than 250 investment grade and 140 high yield issuers, across developed and emerging markets.

Results

By leveraging their experience and ready-to-use research and modelling framework across multiple sectors, The Smart Cube analysts accelerate the client’s decision-making processes.

When new credit deals come into the market and volume increases, the client has the reassurance of knowing there’s an offshore team behind it, ready to support in maintaining and expanding research coverage, through a flexible and cost-effective model.

Tangible benefits from the partnership include:

  • 40% research cost savings: The Smart Cube’s offshore research team has enabled the client to realise cost savings of over 40%, compared to setting up an extended internal team
  • Significant time savings: Timely research and intelligence drives faster turnaround times on new deals due to use of automated templates and experienced sector-specific analysts
  • Results derived more quickly: For data intensive projects, the analysts design algorithms to automate specific processes, which delivers actionable insights to the business faster
  • Strategic focus for in-house team: External analyst support frees up internal resources to conduct research on additional sectors and identify key catalysts for investment decisions, which helps to improve the firm’s investment portfolio.

Value delivered

  • Positive impact on the bottom line through quantifiable cost savings on research
  • A scalable solution which enables the client to enhance its credit research capability across asset classes
  • Leveraging the latest cloud technology to deliver output through a digital workflow tracker and credit analysis tool
  • Experienced specialist analysts with diversified expertise in financial investment and credit research, and accreditations including MBAs, CFAs and FRMs
  • High standards of research and client service maintained across all work through an additional layer of dedicated supervisory analysts