West Coast Hedge Fund Reduces Trade Errors With LiquidityBook

Blog entry

Since San Francisco-based multi-strategy hedge fund Pier 88 Investment Partners implemented LBX Buyside POEMS (Portfolio, Order and Execution Management System) from service provider LiquidityBook in the third quarter of 2016, the fund has eliminated trade errors, gotten greater transparency and enhanced its networking capability.

Pier 88’s trade execution and portfolio management has had “very noticeable” improvement, including greater visibility of monitoring portfolios, says Jackie Fertitta, chief compliance officer and chief operating officer of the fund. “The straight-through processing of trades with our brokers, fund administrator and multiple custodians has been an incredibly valuable feature to our portfolio managers,” she says. “It eliminates trade errors and omissions imperative to fully understanding portfolio risks at the start of each day.”

Pier 88 Investment Partners manages four funds. LBX Buyside POEMS has “streamlined” Pier 88’s management of positions across these funds, according to Fertitta. “LiquidityBook provides readily accessible transparency across all our funds and separately managed accounts — allocating trades, rebalancing the portfolios and monitoring sub-sector and individual issuer exposures,” she says.

LBX Buyside POEMS capabilities include real-time NAV, full historical profit-and-loss figures, risk management and reporting. The system also offers the LBX Connect FIX routing network for connectivity to over 250 destinations worldwide. Pier 88 found additional benefits from the FIX network.

“As a small firm, our portfolio managers can be on the road for client meetings or research conferences,” says Fertitta. “LiquidityBook’s web-based access was ideal to help oversee the portfolio remotely. It enables us to route trades on demand in whatever execution methodology desired by having access to our brokers’ electronic trading desks and algorithms anywhere.”

Around the same time that LiquidityBook began serving Pier 88, it also signed on two other San Francisco-based funds, Zeo Capital Advisors and Solstein Capital. Zeo specialises in a long-only fixed-income fund, while Solstein runs a hedge fund and launched a new long-only strategy in the fourth quarter of 2016.