BlackRock Inc. is far from the only asset manager focusing on technology upgrades to adapt to an increasingly evolving investment landscape.
J.P. Morgan Asset Management is investing heavily in technology through the creation of an investment platform called Spectrum, incorporating next-generation software development tools and practices, and storing certain applications on the cloud, CEO Chris Willcox said in a March 28 email.
Spectrum has been in development since 2015. The firm declined to disclose how much it is spending on the platform, but spokeswoman Kristen Chambers said, “it's a significant investment.”
Specific examples of New York-based JPMAM's new platform capabilities include Hibiscus, its custom portfolio construction and scenario analysis toolkit; Research Notes, a system for writing and searching proprietary research material, seamlessly integrated into the investment process; and Cortex, its electronic order/execution management system for fixed income.
“We have made our in-house analytics available to clients through our portfolio insights program, and looking forward, we are actively working with a number of new technologies, including natural language processing and predictive analytics” to generate alpha and improve efficiencies within the sales teams, Mr. Willcox added.
Over that same period, JPMAM decommissioned more than 200 legacy applications as part of streamlining its application landscape and reducing legacy infrastructure spending.
Meanwhile, ClearBridge Investments LLC has invested in technologies that improve the service to its clients. In the past few years the New York manager has upgraded its website and social media management platforms, automated commentary capabilities, data optimization tools, real-time cybersecurity monitoring and systems integration code.
Joseph A. Sullivan, chairman and CEO of ClearBridge parent company, Legg Mason Inc., said increasing technological capabilities has become both a huge challenge and a huge priority for the Baltimore-based manager.
“We need to invest at an increasing rate in technology. Technology will change the way investing is done,” Mr. Sullivan said in an interview in his office on March 7. “It will change all the drivers of the business.”
The Legg Mason CEO added: “We now need to think of ourselves as a technology company.”
Legg Mason spokeswoman Maria Rosati declined to disclose how much the firm is spending on upgrading its technology capabilities, but said it has “tasked other parts of the firm to reduce costs so we can self-fund our initiatives.”
Separately, Boston-based quant firm Acadian Asset Management LLC announced in March it would be the first investment firm to use Microsoft's Bing Predicts macroeconomic indicators to augment its investment forecasting frameworks and seek greater potential investment returns. Acadian will explore the use of Microsoft's new predictive signals of economic activity derived from aggregated internet search and social media activity.
Bing Predicts is a prediction engine by Microsoft that uses machine learning from data on trending social media topics, along with trending searches on its Bing search engine.