IBOR Special Report
The investment book of record (IBOR) has had a short but interesting history, marked by a phase of indifference followed by a period of intense appeal. Barclays Global Investors claims to have built the first such system back in 1999, but from there the IBOR trail turned cold and the underlying technologies and business drivers were apparently forgotten. It was some time after the global financial crisis that IBOR started buzzing again, as vendors began hawking such solutions to the buy side, and asset managers began multi-year implementations, convinced of IBOR’s business case.
These days you can’t have a conversation about portfolio management without IBOR being mentioned. The vendors that sell the technology evangelize about its benefits to traders and portfolio managers as well as to those in the middle and back office. Advocates argue that all but the smallest buy-side shops would benefit from switching from spreadsheets to an IBOR.
Aggregating positional data for accurate start-of-day and intra-day portfolio views is not a novel concept, and to some degree, it can be done without an IBOR. But it is manually intensive and time-consuming, and a waste of a portfolio manager’s time. Data is often siloed by business line or asset class, so it can’t be retrieved with the push of a button. However, IBOR’s biggest advantage is that it automatically centralizes firms’ holdings data; it processes trades, corporate actions, and other events; and can spit out updated reports in real time. In short, it creates a single version of the truth and shows users, on demand, what that version is.