Credit Suisse Bets on Aladdin

Credit Suisse is banking on a U.S. partner to help digitize its asset management arm – and is already thinking one step on, finews.asia has learned.

Behind the scenes, Credit Suisse's funds arm has been working at fever pitch towards January 21, when the unit rolled out Aladdin – a Blackrock-run platform which helps assets managers check risk in their portfolios, trade, manage data management and other operational tasks.

As a result, the Swiss bank has put $320 billion in assets in 300 funds and nearly 2,000 mandates into a unified digital structure, from portfolio management to «best execution» through middle- and back-office functions as well as compliance and risk management. The move to dock into Blackrock, the world’s largest asset manager, is a first for a Swiss bank.

«Genie» Option

Aladdin – or asset, liability, debt and derivative investment network – was conceived by the New York-based firm in the late 1990s as an internal tool. Today, it is one of Blackrock's most powerful tech tools that it sells to smaller rivals, in a bid to stave off pressure on its actively management fund arm from cheaper index funds.

Britain's Schroders and Germany's DWS has both opted for the «genie» option. Analysts estimate that Blackrock's risk management now oversees ten percent of global assets. The tool functions as a «community» in which demands from clients like Credit Suisse are baked into the technology's design.

Cuts vs New Jobs

Credit Suisse has never detailed the costs of the complex and months-long rollout. The bank, which said the Aladdin introduction is within the planned timespan and budget, expects a shift in asset management jobs as a result.

«New job profiles will be created, including in technology, and will offset potential job reductions in other areas», Credit Suisse said. Michel Degen (pictured below), asset management boss in Europe, the Middle East, and Africa, argues the migration is to unify Credit Suisse's infrastructure and to lay the foundation for using data. The rollout is the first step in what Degen says in the future of asset management.

Credit Suisse has built Aladdin into its asset management infrastructure, where it is part of a new data warehouse which collects and aggregates data on portfolios, performance, and clients.

Using Data