A Conversation with IMTC Insiders: A Portfolio Manager’s Perspective

Two of IMTC’s senior managers had been fixed income portfolio managers (PMs) before joining our firm, so they have first-hand knowledge of how our platform can make a big difference to our clients. We sat down with them, interview-style, to discuss how their previous roles as PMs relate to what they do here at IMTC.

Tell us about your current roles at IMTC and how your past experiences as PMs inform what you do here.

Patrick Duffner: As Senior Enterprise Sales Specialist at IMTC, I use my experience in institutional sales and trading and managing portfolios for HNW clients to truly understand an investment manager’s pain points. I show prospective clients how the analytics and features in IMTC’s platform can improve their entire investment decision-making process—from generating ideas to implementing trades, and everything in between. Our “keep it simple” philosophy focuses on providing intuitive tools that can be customized to meet a client’s needs. It sounds like an advertisement, but based on my experience, I know it’s true.

Kevin Bliss: As IMTC’s Senior Product Manager, I am responsible for identifying and prioritizing enhancements to the platform’s functionality and feature set. A key part of that is gathering input from clients and prospects regarding their workflows and the tasks they need to achieve. As a fixed income portfolio manager for nearly 20 years, I managed various strategies across sectors and currencies. Along the way, I implemented and employed a number of portfolio management platforms, and that provides useful insight on how processes and systems can be aligned, and where they can go awry. IMTC is doing something different and special. We have combined a complete array of thoughtfully designed workflow-oriented capabilities into a fully cloud-based offering.

Why did you decide to make the move to IMTC?

KB: I was with Deutsche Asset Management for almost 20 years, in institutional fixed income. Like many firms, Deutsche’s institutional business had to work to manage costs to stay competitive as fees across the industry declined, without compromising quality. Technology can be the solution, but it has to be done thoughtfully. When I look at existing investment management technology there still seems to be a disconnect between what legacy platforms offer and the fees that investment managers can charge today. I felt that IMTC was addressing those issues and my experience gives me insights now into how to make IMTC’s platform more useful. For example, as a cloud-based solution, we were able to create deep links that allow multiple PMs to collaborate on the same portfolio at the same time, from different locations.

PD: At J.P. Morgan, we were trying to grow our client base by lowering account minimums. I was concerned about how we could deliver the white-glove service that fixed income portfolio management demands without having the right technology. Many PMs were using passive bond ladders as a cookie-cutter solution. Not that ladders are bad or wrong, but to use that as an automatic solution is not providing a personalized service. While a $5 million bond portfolio would be very small for an institutional account, it is a lot of money for an individual, and the fees they pay are not trivial. What are you getting for those fees if the PM just sets it and forgets it? Without feature-rich, scalable technology, customization across many accounts isn’t possible.
I came to IMTC because we provide the tools PMs need to be able to get to solutions efficiently. We automate redundant, time-wasting tasks so that our clients can get to actionable insights and then execute them with a couple of mouse clicks. We are incredibly workflow-driven — I know that’s a buzzword, but we really understand how our clients spend their day, and we focus on how to make their processes much more efficient. If you spend most of your time on five or six things, we put them together in one place. That gives you back your time to proactively help clients.

What was the biggest thorn in your side as a fixed income portfolio manager?

PD: Cash raises and having uninvested cash that needed to be put to work. When clients needed money from their accounts, it was time-consuming to figure out the best way to accomplish that for each account, with a big potential for error. Similarly, deciding how to optimally invest cash, particularly if we didn’t like where rates or spreads were at the time. On IMTC’s platform, PMs or Operations can tag portfolios and then filter on data points so it’s straightforward to take action. Firms want to provide high-level service but also want to grow their client base. The more clients you have, the more likely it is that something will be overlooked or done poorly unless you can automate your processes.

KB: I was always a stickler for data – I handled large amounts of data in my previous position and it was cumbersome. Having bad or missing data was a big thorn in my side. IMTC does a great job with presenting what you want and need, instead of overloading PMs with too much information.
As just one example, if you plan to buy an issue and are looking to allocate it across accounts, you can quickly find the accounts that either do not have exposure or can take additional exposure up to each portfolio’s individual limit by using the Optimizer to figure out the best way to allocate. IMTC also takes monitoring data quality very seriously. We do a full validation process every morning, and clients can establish tolerances for day-to-day changes; we highlight anything that violates those thresholds.

What is the one feature in IMTC you wished you’d had when you were a PM?

PD: I wish I’d had IMTC’s tools for generating ideas that fit the objectives for each client’s account (e.g., to be long or short a benchmark, over- or under-weight a sector, etc.) and compliance rules. IMTC’s optimizer allows you to do this so efficiently. It provides trade ideas that are actually executable across a large number of accounts, based on bonds that are available, and are consistent with the account’s targets and compliance rules. It is such a time-saver; it frees you up to focus on other things.

KB: I also wish I’d had IMTC’s optimizer! There has always been a great deal of skepticism about optimizers in the fixed income world — people don’t even like the word “optimizer.” Optimizers can be black-boxy. Some PMs feel threatened by them. Others have been frustrated in trying to use optimizers that are slow and produce solutions that are just not practical. Ours does some intelligent prioritizing and uses categories to figure out which bonds can actually fit a portfolio, and to pre-exclude those that cannot. That makes it efficient. I wish I could have used it with IMTC’s Targets feature that keeps portfolios aligned with their strategies. Together, these tools allow PMs to prioritize trades across accounts while meeting their objectives.

How do you stay connected to the markets and trends since leaving the buy-side?

KB: I read a lot. I read Bloomberg News and the Wall Street Journal to keep up with the themes that are playing out in the markets. Knowing the media tends to portray things for more readership, I usually double-check the tone of the story with former colleagues who are close to their respective sectors. I also look at publications from industry groups (i.e. SIFMA, CFA Institute, etc.) and prefer to listen to Fed speeches, press conferences, and testimony directly to avoid misinterpretations that sometimes occur in the media – I like to go right to the source.

PD: We have access to data and news sources at IMTC, plus I speak with PMs all day, every day. I have actually gained a new appreciation for their challenges, beyond the perspective I had when I was a PM. I can better appreciate views of what is going on in the markets by talking with PMs who have a range of opinions.

Kevin, how do you ensure IMTC’s product development matches the needs of fixed income managers?

KB: I am knowledgeable about fixed income portfolio management and I am always excited to develop more things. But, while my knowledge helps to keep things on track, it is not the starting point. We rely on input from clients and prospects to guide our priorities and gather that input through our sales channel. Also, our developers are very skilled and come from various industries. They take input from the sales team and our clients to design creative solutions instead of relying on narrowly defined approaches.

Patrick, what motivates most firms to talk to IMTC about a solution?

PD: There is usually some type of catalyst. Maybe there was a big trading error in a client’s account, or the firm knows it has to lower its fees and automation is the only way they can make that work. Some firms look at IMTC because they are frustrated with a current system that doesn’t really capture their workflows. To be honest, many firms are still doing a lot with Excel – I’ve seen spreadsheets that have dozens of tabs. This is true even in large institutions that have thousands of active accounts and high-end systems; they are often doing things like compliance-checking manually. That approach is frankly untenable in today’s world because it introduces so much room for error. People are comfortable with Excel, but we make it so incredibly easy to use the tools on our platform, they end up being relieved to be using IMTC.

Thank you, Patrick and Kevin – we appreciate your insights!
Technology is only as good as how it is used. IMTC is designed by and for fixed income professionals, empowering them to take action and make decisions quickly and accurately with real-time data and analytics capabilities. It allows you to future-proof your business; driving operational efficiencies, mitigating risk and delivering performance, to ultimately enable business growth. 

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