The client is a global investment manager, established in 2001, with a focus on collateralised loan obligations (CLOs) and US senior secured leveraged loans. The client manages approximately US$9bn in CLO AUM and is located in New York. Since its inception, the client has issued over 30 CLOs and Deutsche Bank Trust Company Americas has acted as trustee and collateral administrator to each of these.
In a yield-driven and increasingly competitive environment for asset managers, the investment manager faces the challenge of scaling up its business as efficiently as possible. Compared with their older vintage CLOs, which had fewer and larger position sizes, generally in the US$1-$2 million range, their more recent CLOs have positions as small as US$100,000, thus changing the entire composition of their CLOs. These changes in portfolio construction lead to a significant increase in all related activity including trading volumes, wire receipt and remittance, asset attribute tracking and asset servicing. With these changes the client is confronted with two dimensions of growth – both in the number of portfolios managed as well as the intensity of work involved with each portfolio. Constrained by industry fee compression, it is readily apparent that asset managers require scalable and controllable solutions in order to achieve their growth aspirations.
Deutsche Bank’s Structured Credit Services team has collaborated with the client to streamline and automate the exchange of information. Leveraging Cash Book’s dynamic reporting generation features, Deutsche Bank has automated the nightly delivery of custom data files to the client via SSH File Transfer Protocol. The client in turn has developed an automated reconciliation software that consumes Deutsche Bank’s custom data files, and automatically identifies discrepancies between both the bank’s and the client’s data. This exchange and reconciliation cycle is supported by a best-in-class service team, which provides the client with a single point of contact for all inquiries related to the transaction. By partnering with clients to meet their needs, Deutsche Bank has enabled them to leverage the bank’s technology—via automation--to increase their efficiency without the need for additional resources, and thereby allowing them devote more focus on growing their business and adapt to the ever-changing investment landscape.